Income Tax Provision

This query is : Resolved

CA. Mala Rohara (Querist)
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12 April 2011 In F.Y. 2010-11:

Opening Balance:
Provision for IT 20,00,000/- Cr.
Advance Tax : 10,00,000/- Dr.
TDS Receivables: 2,00,000/- Dr.

Self Assessment Tax Paid on 30/09/2010 : 13,00,000/- ( including 2,00,000 Interest u/s 234 B & C)

Following entry passed:
Provision for IT Dr. 20,00,000
To Advance Tax 10,00,000
To TDS receicables 2,00,000
To Self Assessment Tax payable 8,00,000

Self Assessment Tax Payable Dr 8,00,000
Interest on IT Dr. 2,00,000
Income Tax Dr. 3,00,000
To Bank 13,00,000

Is this correct?
Under which group Interest on IT will be accounted for?

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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12 April 2011 Interest on IT will be treated as Income tax payment.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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12 April 2011 Ideally, the above adjustment entry should not be passed till the actual assessment order is received.

The balances of Advance tax / Provision for Tax / TDS receivable / Self assessment tax should remain in the balance sheet (Yearwise) & the adjustment entry should be passed on receipt of assessment order.

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