Jayanta Bandyopadhyay (232 Points)
17 February 2023When there is a short or excess provision of income tax as accounted for in audited accounts per Co Act vis a vis Income Tax Act, how do we account for the same after account closing by A COMPANY?
Please guide journal entry and modality / mechanism
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 17 February 2023
CA Rashmi Gandhi
(Chartered Accountant)
(86285 Points)
Replied 17 February 2023
Jayanta Bandyopadhyay
(232 Points)
Replied 18 February 2023
Yes.Mr.Nilugal.
Kindly advise journal [ short or excess provision] entries at the time of making tax payment as per tax audit / assessment per IT Act, while tax provision was previously made as per Co Act.
Regards
CA Rashmi Gandhi
(Chartered Accountant)
(86285 Points)
Replied 18 February 2023
Jayanta Bandyopadhyay
(232 Points)
Replied 18 February 2023
Many thanks.
Please state journal for short provision
Rgds
prasad Nilugal
( GST Practitioner & Accounts )
(14221 Points)
Replied 18 February 2023
On 31/3/2023 provision for Income tax, let's say 50000/- ( example)
Income tax A/c Dr 50,000/-
Provision for Income tax A/c Cr 50,000/-
( provision entry)
Next year after assessment Income Tax payable is 80000/- so short provision and balance income Tax payable is 30000/- , after adjustment of Advance Tax and TDS carried forward from last year and same has been already paid ( Advance Tax 15000/- , TDS 5000/- )
Provision for Income Tax A/c Dr 50000
Income Tax payable ( last year) A/c 30000/-
To Advance Tax. A/c Cr 15000/-
To TDS A/c Cr 5000/-
To Bank A/c Cr. 60000/-
( Last year income tax paid after adjustment of Advance Tax and TDS)
Here TDS is deducted by party during the F.Y
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