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Tally entry fro income tax

mohd irfan (acct.) (82 Points)

31 August 2021

I paid advance tax in 2019-20 Rs 70000

I filed ITR on 10/12/20 and with Tax computation was Rs.62000

Tax refund is Rs 8000

How to pass entry in tally and under what head the ledger of IT refund to be created

It's a partnership firm with 35,35,30% ratio of 3 partners.

Refund received on 10/1/21

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6 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 31 August 2021

Advance Income tax paid entry

Advance Income tax. A/c Dr 70000/-
To Bank A/c Cr. 70000/-
( Payment of Advance Tax)

On 31/3/20 you have to make provision for Income tax .
Income tax A/c Dr 62000/-
To provision for Income tax A/c Cr 62000/-
( provision for Income tax )

On assessment on 10/12/20 pass adjustment entry.
Provision for Income tax A/c Dr 62000/-
Refund of Income tax A/c Dr. 8000/-
To Advance Tax A/c Cr. 70000/
( After payment of tax refund receivable )

when you receive refund pass entry
Bank A/c Dr. 8000/-
To Refund of Income tax A/c Cr 8000/-
( refund claim )

Refund. amount will be transferred to partners capital account in ratio of 35,35,30 %
entry will be
Refund Income tax A/c Dr 8000/
To partner A Capital A/c Cr 2800/
To partner B Capital A/c Cr 2800/
To partner C capital A/c Cr 2400/
refund transfer to capital account

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 01 September 2021

Agree with above entries

mohd irfan (acct.) (82 Points)
Replied 01 September 2021

F.Y 2019-2020 Advance Tax paid Rs. 70000

but no provison for income tax account leder is made now can't pass entry for provision on already assesment for F.Y2019-20, as adjustment entry to be passed after computaion date which is 10-12-2020 (F.Y. 2020-21) and Tax amount was Rs. 62000

If I pass entry on 10-12-2020 i.e

Income tax a/c Dr 62000

income tax refund a/c Dr 8000

To Advance Tax Cr 70000

Kindly check the attachement for acutal amount and entry.

HOW TO MAKE PROVISION FOR INCOME TAX LEDER UNDER WHICH HEAD IN TALLY AS I HAVE PAID ADVANCE TAX FOR F.Y. 2020-21 RS. 25000/- AND NO PROVISION MADE not sure for income tax amount

Attached File : 744179 20210901184319 income tax payment entry.doc downloaded: 48 times

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 01 September 2021

At the end of the year on 31 March you have to make provision for Income tax . For partner ship firm 30 % of net profit Income tax applicable ,so you have to calculate the same and make provision , this provision is not accurate , because assessment and payment of tax is done in the next financial year and you came to know correct tax payable only after assessment means filing of return and scrutiny by department ,so
in your case we have done adjustment entry 10/12/20 , means how much you paid tax last year and tax payable after assessment .

I have taken 62000/ as provision tax because I don't know how much your tax 30% of profit , that you have to take as provision .

provision entry
Income tax A/c Dr
To provision for income tax A/c Cr
( provision made)

in above entry
1),Income tax A/c under Indirect Expense in profit and loss account
2) Provision for Income tax A/c under Current liability under provisions , liability side balance sheet in Tally .

mohd irfan (acct.) (82 Points)
Replied 01 September 2021

As i have attached a file with entry in tally are they all are correct.

Kindly share your view

as provision for 2019-20 cannot be made in 2020-21 in 2020-21 provision for same f.y can be made.

prasad Nilugal ( GST Practitioner & Accounts ) (14171 Points)
Replied 01 September 2021

1) We are making provision in the F.Y 19-20 on 31/3/2020 not in F.Y 20-21

2) In Tally payment entry you have debited to Income Tax 19-20 A/c , instead of Provision for Income Tax A/c 19-20 . You have pass adjustment / payment entry according to the provision made and advance tax paid .

3) on 31/3/2020 you have make Provision and carried forward to next F.Y 20-21 instead of directly debiting to Income Tax 19-20 A/c