Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Is income tax an expenditure

4852 Deepak Raja.S (1 Points)

11 May 2021

Is income tax an expenditure ? Justify please

Reply
Follow
Share

6 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 12 May 2021

Yes it is an expenditure. Provision should be created first for Income tax and then it should be paid

Upgrade to CAclubindia Pro. Subscribe Now!

Sivaramaraju G (Learner) (2398 Points)
Replied 12 May 2021

I think no and yes, 1) No, as you pay tax only when you have profit/income. if you don't have any profit then you won't pay. but expense has to incur whether you have profit or loss. we can say like appropriation of profit 2) yes, it is nature of expense as you have to pay to govt when you have a profit. I mean to say if you have profit then it will be an expense to you.

veerendar singh (tax consultant) (3301 Points)
Replied 12 May 2021

Depends on how you perceive it and in what context you are considering it.

CMA Poornima Madhava (CMA) (13112 Points)
Replied 12 May 2021

I agree that, in general, tax is payable only when there are profits but loss can be carried forward and future tax can be adjusted against such loss. In that case, how do we perceive tax? I think income tax is an appropriation of profit. Correct me if I am missing anything.

1 Like