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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Interest and Penalty on Statutory Liabilities
Replies (5)
Quick Summary
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
If payment falls in subsequent FY & if it is determinable then you may create the provision through journal entry
If it is determinable as on year end then you can create the provision as on 31st March.
Let us know in which month you want to make provision & when was the penalty paid and how much ?
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.
You may book in the payment entry .. Payment beyond liability can be adjusted in late fee , interest or penalty
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