Income tax refund

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Priya Joshi (Querist)
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05 September 2009 What is the treatment of income tax refund in case of different assessee like company, NGO, trust, etc. In case of proprietorship firm or partnership firm we transfer it to capital account. In case of company if we transfer it to P & L appropriation account, can we distribute dividend out of it?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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06 September 2009 When you have paid the advance tax or self assessemet tax if you have kept under advances under balance sheet then you have to credit the same to that account excluding interest and the interest will be credited to profit and loss account.

If at the time of payment if you have debited to profit and loss account hten you can credit to profit and loss appropriation account and from that you can distribture dividend out of it.