Income tax payment and journal entry ?

for Co. prov on income tax is made where as in case of firm n indl files tef'ed to capital a/c (generally)

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

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

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

the above entries are correct

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..

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.

the above entry is correct.

Hi,Vineet

If Tax provision exceeds to Tax paid(Adv tax, TDS) you need to pay in that year by Debiting Tax A/c  Crediting Bank/Cash A/c.

If Tax provision is less than Tax paid(Adv.tax,TDS) you have to claim for refund.

Originally posted by : Sravanthi
	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

thank you my friend for replying,

Like the above explanation could you please tell me the cases where i t provision exceeds tax paid and vice versa. What are the adj that needs to be carried out. Please show entry wise if possible; would be great if you can cite the principles applied.

WAT WOULD BE D ENTRY IF PROVISON FOR TAX SHORTFALLS IN COMPARISON 2 ACTUAL TAX PAID

When Individual, firm and company pay advance tax

       Advance Tax A/c Dr.      *****

            To Bank A/c   Cr.      *****

When TDS deducted by other parties

         Advance Tax (TDS) A/c Dr.   ****

             To Party Name (Who deducted TDS) Cr.  *****

When Tax deposite under section 140(a) as self assessment 

          Income Tax (for respective assessment year) A/c Dr.  *******

                  To Bank (if there is any payable) A/c Cr.                  *****

                  To Advance Tax A/c Cr.                                                *****

these are sufficent enties if we want some thing special than we make some more entry for due to respective entry