Provsion for tax enries to be passed....plz help!

31st March:

Dr. Income Tax (P & L)

Cr. Provision for Income Tax (BS provisions)

Reversal of Provision:

Dr. Provision for Income Tax

Cr. Income Tax ( P & L)

Provison for tax is the amount of provision for the income tax liability

i) Advance Tax Dr.

         To Bank A/c

i)  P&L A/c Dr.

         To Provision for Income Tax

ii) Provision for Income Tax Dr.

              To Advance Tax

This Entry is passed at the year end

And in case of short provision book the additional income tax paid as expense

Income Tax F.y. __________ Dr.

            To Bank A/c

Ashish ji ne examples hi toh diye hai... For excess provision, you need to reverse the original entry to the extent of excess provision. So make entry exactly opposite of the entry that you would have made at the time of making provision.  So reversal will be;

Dr. Provision for Income Tax (Balance Sheet item)

Cr. Income Tax (Profit & Loss Account item)

Hope it is clear..

Originally posted by : ashish gupta
	ii) Provision for Income Tax Dr.               To Advance Tax This Entry is passed at the year end   And in case of short provision book the additional income tax paid as expense Income Tax F.y. __________ Dr.             To Bank A/c

Ashish in my opinion these entries are to be done upon actual completion of assessment, not neccessarily at the end of the year.

Correct me if i am wrong.

In the year of Making Provision say 31.3.2011

Entry Are

Profit & Loss A/c Dr  XXX

       Provison for income tax A/c   XXX

2.In the event of Self Assessement(Payment of Income Tax) say 25/09/2011

    Provision for income Tax  XXX

          To Advance Tax                     XXX(If Any)

           To TDS                                   XXX(If any)

            To Income Tax Payable     XXX(Balance)

3. If u have created a excess provision on 31/03/2011 then to write off excess provision the following entry must be passed along with Above entry in point 2

   Provision for Income Tax    XXX

       To prior period Items              XXX

4.If u created less provision than required then u have u pass the following entry along with entry made in point 2 

    Prior Period Items  XXX

           To Provision for Income Tax    XXX   

      Excess or  less provision of income Tax should be Debited or crdited in prior period items according to Accounting Standards prescribed by ICAI

The Above are correct in every respect

Any time Celiena,

Dea Friends,

i hope the attached file will be helpful for you to understand all the tax related entries....

https://www.4shared.com/document/dGtq-I_G/Accounting_for_Closing_Income_.html