Vaibhav Jandey (Life iz Hard; I'm Harder) 24 August 2012
Dear Friends,
Today I just stuck up thinking how the entries for Income tax payment are passed in Companies, Partnership Firms etc.
I would like to know the whole solution to this Income tax entry i.e. all the aspects eg TDS, Advance tax and Provision for Income Tax.
Have different angles towards it.
Please share your knowledge whatever you feel right in your views.
Nitesh Matta (Nothing) 24 August 2012
Sravanthi (CA Final ICWA Final & M.B.A) 24 August 2012
For Advance Tax:
Advance Tax a/c Dr
to Bank a/c
Advance Tax - Asset
For TDS:
TDS a/c Dr
to party a/c
TDS Asset
Sravanthi (CA Final ICWA Final & M.B.A) 24 August 2012
for Tax Provision
P & L a/c Dr
to Provision for Tax a/c
Provision for Tax is a Current Liability & Provisions
for Payment of Tax:
Provision for Tax a/c Dr
to Bank a/c
Sravanthi (CA Final ICWA Final & M.B.A) 24 August 2012
for Finalisaion
1,Tax a/c Dr
to Advance Tax a/c
to TDS a/c
Tax is to booked as an Expenditure
2, P & L a/c Dr
to Tax a/c
Finally Advance Tax & TDs to be Nil. for Checking Purpose
Vineet (Assistant Manager) 24 August 2012
if there is a difference between provision and actual tax paid in that case reversal entry is require(if provision exceed tax)..and if tax part exceed provision in that case nothing needs to be done..please correct if I am wrong..as I am not very sure about it..
R M SHAH (CA) 25 August 2012
Entries shown by Sravanthi are absolutely correct and Vinnet in case where tax exceeds provision entry for short fall of tax of P.Y. is required to be pass in succedding year.
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