Is income tax an expenditure ? Justify please
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Is income tax an expenditure
Replies (6)
Quick Summary
Yes it is an expenditure. Provision should be created first for Income tax and then it should be paid
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.
Depends on how you perceive it and in what context you are considering it.
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.
Income-tax is not an expense. Look up profit and loss account.
It is an expenditure per se but not tax deductible
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