Hello,
This is regarding calculation of Partner's Remuneration when there is provison of Income tax. Currently these entries are posted in the account:
| Dr | Advance Tax Paid | 25000 | |
| Cr | Bank | 25000 | |
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Date: 30-6-16
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| Dr | Advance Tax Paid | 25000 | |
| Cr | Bank | 25000 | |
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Date: 15-12-16
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| Dr | Profit & Loss A/c | 52000 | |
| Cr | Provision for Income tax | 52000 | |
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Date: 31-3-17
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| Dr | Provision for Income tax | 50000 | |
| Cr | Advance Tax paid | 50000 |
Profit Before this provision : Rs 200,000
Firstly please let me know if these entries are correct on respective dates. The last entry is also posted on 31-3-17. This way the provision of income will be shown in Balance Sheet as Rs 2000 and the profit will go down by Rs 52000.
However when calculation partner's remuneration - should remuneration be counted as 90% of Rs 200,000? Or should it be counted as 90% Rs 148,000?
Thanks for your help.
CAclubindia
