income tax provision

This query is : Resolved

Guest

Guest (Querist)

11 November 2008 Q 1: What is the difference between Advance tax & Provision For Tax?
Q 2: When the requirement of Tax provision arises?

Deepak Agrawal

Deepak Agrawal (Expert)
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12 November 2008 1. Advance Tax is prepared and paid with goverenment before due dates. It is an advance (current asset) and not expense. Where as provision for tax is expense which are computed on the basis of income tax act, 1961. Its an expense.

2. Tax Provision arises if U have taxable incomes as per income tax act,1961. All person, entities,etc habe to provide for tax & pay, if required irrespective of its status i.e. whether individual, company, firm, trust, etc.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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12 November 2008 Advance tax for an assessment is the payment against recognition of tax liability for that assessment year for which provision can be made as and when you compute the possible liability for a period during that year!

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