2)As per sec 145A of the Income Tax Act,1961 value of VAT needs to be included in
closing stock. Correct or incorrect?
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Stock valuation
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No...
Stock valuation is basic value only. Tax amount is not included in stocks. It's not a current asset.
Stock valuation is basic value only. Tax amount is not included in stocks. It's not a current asset.
if concern follows exclusive method of accounting then it is contradictory to 145a and one has to report on form 3cd that due to exclusive system there is no impact on profit or gain
However as per ICDS II,now it is mandatory to include the same just for reporting purpose in 3CD.The same would increase the income and taxes are to be paid accordingly.However if you still deviate the standard,a note must be provided for such deviation.
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