It refund

Income Tax Refund is not income, but interest on income tax refund will be income from other sources for both individual and company.

Suppose, TDS of Rs. 10,000 was deducted on the income of the Company/ individual and the tax liability comes to Rs. 8000.

Then, at the time of provision,

(i)Profit & Loss A/c                                              Dr  8000

                          To Provision for Income Tax A/c                     8000                        

 When the Asset Order will come and refuund of Rs. 2100 (Interest on refund Rs. 100),

Provision for Income Tax                         Dr.       8000

Income Tax Refundable/ bank                Dr          2100

                  To TDS                                                                          10000

                   To Interest on Income Tax                                               100