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Incometax refund ledger and group

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Dilip Khambete

132 Points Posted on 03 November 2022

Hello

I want to pass an entry in tally for tncome tax refund which i received.

I have created ledger 'incometax refund' but what group should it be under?? Is it 'indirect income' or ' capital account' or any thing else?

Internet search gives conflicting answers. So i wanted genuine help

Same goes for professional tax entry of 2500 which i did. What group should i put it under??

Regards

Dilip khambete

Replies (9)

Quick Summary

Income tax refund in Tally should not be created as a separate income ledger; it is adjusted against TDS and provision for taxation (asset side). Professional tax is generally recorded under 'Duties and Taxes' (liability), or as indirect expense in some employer-related cases.

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 03 November 2022

You have to adjust against provision for taxation and Tds ( Asset)

Provision for Taxation A/c Dr
To Tds ( Asset)
To Interest on IT refund

New ledger is not required for income tax refund

prasad Nilugal

GST Practitioner & Accounts

15152 Points Posted on 03 November 2022

As per second query , professional Tax will be
deducted from salary. so pass entry

Salary A/c Dr
To Salary payable A/c Cr
To Professional Tax A/c Cr
( Being salary payable after deducting professional Tax)

So professional Tax will be under Duties and Taxes, Liability side , Balance sheet .

When you pay professional Tax in Govt Account pass entry

Professional Tax A/c Dr
To Bank A/c Cr
( payment of professional Tax in Govt Account)