Provision for income tax

If a partnership firm has not paid any advance tax then whether it can create a provision in P & L account for the income tax  to be paid in next FY. If yes then the profit will get reduced to that extent so whether the income tax liability is to be computed on the profit before charging the provision or on profit remaining after charging the provision.

 

Also, which profit (before making provision or after making provision) is to be divided among the partner in their profit sharing ratio.

Replies (3)

Hi , income tax shall not be allowed as deduction under the provision of section 40 and therefore provision not to be considered for calculating profit.

agreee with above

AGREED WITH SHASHANK

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