Sir,
Please suggest below provision for income tax is correct or wrong in books of account in proprietor firm
Capital account Dr.
provision for income tax Cr (current liability)
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Income tax Provision
Replies (3)
P/l a/c dr
to provision for income tax a/c
to provision for income tax a/c
Income tax paid gets disallowed while computing taxable income. so in case of proprietary concern it can be shown as drawings. however for better understanding of financial statements, IT, can be shown as debited to P&L.
Yes correct. you have transfer ur personal income tax in capital ac
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