Schedule vi treatment...plz help

I Donot know about scheduel VI, but Advance tax being a Balance sheet item should not be treated in P&L.

They way i Used to treat it during my articleship days was

1. Usually company would have made a provision for tax for an Adhoc aprrox amount(i.e P&L appropriation) creating a current Liability as on 31/3 and added it to carry forward balance in Provision for Income tax

2. Advance tax paid should be shown seperately as Current Asset along with TDS credits available etc etc

Advance tax is current asset and Current year tax is current liability. U can not add both but only to net off.

Guidance Note on the Revised Schedule VI requires deferred tax assets / liabilities to be classified as non-current.

Current year tax provision (net of advance tax) i.e., Rs. 82500/- (97500-15000) will generally be treated as current liability, as this will become due in the short term. 

Current year advance tax (net of provision) as well as past year’s advance tax (net of provision) shall generally be classified as non-current as these are not likely to arise in the short term.

Advance tax against which refund orders have been passed, and if not adjusted towards other liabilities, will only be treated as a current asset

Originally posted by : Arif Mohammed Khan
	I had a doubt While  preparing financial statements of a company  as per Schedule VI  ,,,,,, Company paid Advance Tax Rs. 15000/- and Current year provision comes to Rs.97500/-,,,, Now whether I have to Add this Advance tax of Rs.15000/- under the head CURRENT TAX in P&L A/c( with 97500/-)(so,15000+97500=112500/-) or show it as a Deposit under the head Deposits (rs.15000) What is the treatment (cosider AS 22) as per Schedule VI?????????/

No, Rs. 15000 will not be added to Rs. 97500.How can advance payment  of tax be charged to P & L ?

Under the Current Year Tax, there will come Rs. 97500.

Originally posted by : Arif Mohammed Khan
	Read all your comments .I agree with it totally i was doing the same way before schedule VI was implemented . Now i have to know the meaning of the head(CURRENT TAX) in P&L a/c. Whether it includes only provision me advance tax paid to be added to or not ?

Move with concept.

We make advance payment on estimation basis.Final provision works out to be Rs. 97500, out of which you have paid Rs. 15000 as advance. So, how can you show 97500+15000 as current Tax ? Advance Payment of Rs.15000 is a part of Rs.97500.

@ Bansal

Provision Rs. 97500 is excluding Advance tax & TDS ,,,,,,,

ie,provision has been calculated in Winman after adjusting Advance tax and TDS

Mr. Arif  I would like to clear some concepts :

Provision for tax means total amount of tax payable for the income of that year including Int. u/s 234.

So that it only stands under current liabilites.

To nullify this effect (generally) there is Advance tax paid during that year + TDS/TCS + (Bal. wiill be S.A.Tax which will we paid in next year )

So in short : Provision for tax = Advance tax + TDS + SA Tax.
So in P&L if you have enter Only provision for tax figure.