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Income tax payment and journal entry ?


Vaibhav Jandey (Life iz Hard; I'm Harder)     24 August 2012

Vaibhav Jandey
Life iz Hard; I'm Harder 
 107 likes  1165 points

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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

Nitesh Matta (Nothing)     24 August 2012

Nitesh Matta
Nothing 
 7 likes  198 points

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i also want this to be known. Anyone can help?

(Guest)

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

2 Like
Sravanthi

Sravanthi (CA Final ICWA Final & M.B.A)     24 August 2012

Sravanthi
CA Final ICWA Final & M.B.A 
 51 likes  737 points

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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

3 Like
Sravanthi

Sravanthi (CA Final ICWA Final & M.B.A)     24 August 2012

Sravanthi
CA Final ICWA Final & M.B.A 
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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

3 Like
Sravanthi

Sravanthi (CA Final ICWA Final & M.B.A)     24 August 2012

Sravanthi
CA Final ICWA Final & M.B.A 
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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

4 Like
harish .k

harish .k (STUDING)     24 August 2012

harish .k
STUDING 
 28 likes  306 points

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the above entries are correct

Vineet

Vineet (Assistant Manager)     24 August 2012

Vineet
Assistant Manager 
 6 likes  140 points

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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

R M SHAH (CA)     25 August 2012

R M SHAH
CA 
 43 points

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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.

Ramanuj

Ramanuj (Accountant.)     25 August 2012

Ramanuj
Accountant. 
 50 likes  829 points

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the above entry is correct.


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