Plz give ur opinion....

Practically speaking u wont be able to get refund just after the financial year is over. it takes time, so the final entry will be lil modified....

so while closing the books of account the entry will be

Provision for IT A\c  dr.. 100

  To Adv Tax A\c                    80 

  To TDS A\c                          10

  To P\L Appropriation A\c    10

 P\L appropriation is below the line of Profit....

and while the amount is refunded the entry will be

Bank A\c    dr...         30

  To P\L appropriation A\c    30

IT refund and IT Paid is neither Expense nor Revenue it is just the adjustment of Profit which will come in P\L appropriation A\c or Below the Line of profit..

Thanks Abishekjain for ur valuable reply...!!! :)

Dear Abishekjain.... how can we pass above mentioned closing entry ????? At that time we dont know the assessment amount????

we created a provision for Rs.100, paid Rs.80 as Adv Tax n Rs.10 is available as TDS,

so i just made a set off entry and rather to keep the balance of Rs.10 in provision A\c trfd it to P\L appropriation A\c...

so when ur assessed the amount of Rs.30 as refund we can pass the receipt entry at the time of receipt....

Just for understanding sake we are just setting off the provision of tax with adv tax and TDS, u can also skip the entry and carry fwd the amount in balance sheet and pass the net off entry when ur assessed but practically set off is done.

THANKS Abishekjain