Income tax write off

Dear Ryan, Check the accounting entries passed in the previous financial year for Refund receivable the entry might be like this.

Ex. IT Payable is  Rs. 75,000/- TDS deducted amount is Rs. 1,00,000/- 

               Income Tax A/c....................................Dr        75,000

                        To TDS revceived A/c                                                75,000

If the entry is like above you have to pass the entry as follows

            Bank A/c....................................................Dr        26,125

                      To TDS Received A/c                                                  25,000

                       To Interest on IT Refund A/c(if any)                           1,125

Some companies will have TDS received amount and some may not.

In those cases the TDS received account is replaced either by Provision of incometax or Advance Tax.

CA B. shankar is 100% right