Sales Tax

Hi Arka,

In respect of P & L  A/c. for year ended 31.03.2009, you can claim Rs. 21,000/- as a Provision for Sales Tax. Since, Sales Tax of Rs. 6,000/- & Rs. 5,000/- are paid in FY 2009-10, reverse provision in FY 2009-10 by Rs. 11,000/-

Dear Arka,

According to Income Tax Act 1961, sales tax is an allowable expenditure. But section 43B says that any tax, cess or duty to be paid under any law (required by VAT Act in your case) is allowed to be deducted upto the extent actually paid before the due date of filing the return of income. In your case, the due date seem to be 30th september 2009. Hence only deduction of Rs.11,000 is allowed as per Income tax act in the assessment year 2009-10.