Treatment for excess payment received from debtors

Stat Audit 13270 views 10 replies

Hello Friends,

 

Can anyone tell me the account treatment for excess payment received from a debtor?

The journal entry to be passed for the same?

Ex: Receivable from Debotr A is Rs. 5000, But actual amount received is Rs. 5500. with no intention of returning the excess Rs. 500 ...

Replies (10)

show as other income.....!!! or transfer it to round off account.. by which automatically it will b treated as income part of business...

OK then what about tax treatment may be vat or cst or service tax as the case maybe.

treat it as miscellaneous income nd pay income tax if u are exceeding taxable limit

 

A Dr.............................5000

To Sales.................................5000

Cash Dr................................5500

To A................................................5500

Credit balance in A=Rs.500

Let this amout outstanding in this account if further transaction is there then adjust it against subsequent transaction. Otherwise at the year end transfer it to the Miscellaneous income and pay income tax.
 

You will have to pay vat if your debtor taking credit of cenvat
I handled same case if debtor is not traceable trf it to misc income and debtor is traceable and future transactions expected u should keep open that amount in his ledger if no future transaction expect trf it to misc income

If any assessee pay extra loan amount then how can adjust those amount for b/s purpose

Cash A/c                  Dr

    To Debtors A/c

The excess amount would be taxable under Income Tax Act, 1961 but under which section or sub section?

EXCESS AMOUNT HOW TO SHOW IN ACCOUNTS

 


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