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advance Tax

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Querist : Anonymous

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Querist : Anonymous (Querist)
13 September 2010
Dear Friends

We pay advance tax quarter wise, but still why we pass provision entry for the same.


Smita

13 September 2010 Because an advance tax remains provisional till the final assessment by the income tax deptt.

13 September 2010 & the same, when adjusted against the tax payable (as calculated by IT deptt), becomes final.


14 September 2010 Provision for income tax liability is definitely different from advance payment of tax. There are two different set of compliances with different timings. Finally whatever advance tax is paid is supposed to match with the income tax liability for which provision is created in final accounts, however in general there are estimation gaps and hence for better compliance and accounting, there are separate accounting entries made.



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