We have to pay certain penalty to IT department which is proposed to be recovered from the defaulting persons. Is the following JE correct- Claims ------Dr
To Bank
Kindly advice.
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Income tax journal entry
Replies (2)
yea same is correct, it will be more effective if you use taxes and penalty in place of claims.
let other say
Yes, penalties and claims A/c , seems to be a proper nomenclature of the same. Moreover, please note that IT penalties are disallowed expenses so it is always better to keep them in different a/c for easy traceability.
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