Income TAx provision accounting entries

This query is : Resolved

Monil Shah (Querist)
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09 April 2009 If suppose ,one companies income tax provison working comes to 25,00,000

advance tax - 10,00,000
TDS -5,00,000
Self assesment tax payable - 10,00,000.

Please tell me all the accounting entries to passed for provision of income tax.

Whether the advance tax and TDS is to be brought back together in provision account?

Or
Advance tax and tds is to be shown seperate in asset side. And the grouping of provsion is to be done under the assets side. Say a group Taxation provision consist of Advance tax ledger,TDS and Provison.In this case no need to be net off.But whether this is OK.Please clarify.

Sanjay Soni

Sanjay Soni (Expert)
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09 April 2009 The following entry to be made for Provision

Profit & Loss A/c Dr
To Provision for income tax

the provision will be shown as below line item in Annaul Accounts

The Balances of Advance Tax paid, TDS & Self Asst Tax paid should be shown under Current Assets under Loan & Advances

once the assessment done then only the advance tax,tds & Self asst Tax can be set off against Provision