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Interest and Penalty on Statutory Liabilities

GOKUL C (1 Points)

03 February 2022

Should we make provisions for interest and penalty payable on TDS, GST, Income Tax etc or should we make the entry on actual payment date.

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5 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 03 February 2022

If it is within the financial year then provision is not required.You may adjust the in payment entry .

If payment falls in subsequent FY & if it is determinable then you may create the provision through journal entry

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Nidhi (Chief Accountant) (3150 Points)
Replied 04 February 2022

If it is determinable as on year end then you can create the provision as on 31st March.

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Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 05 February 2022

Let us know in which month you want to make provision & when was the penalty paid and how much ?

sabyasachi mukherjee (25983 Points)
Replied 05 February 2022

At the year end always the provisions are advisable .But generally all companies tries to pay statutory liabilities at the year end within the end of that month.