Provision for taxation
This query is : Open
26 September 2017
whether interest under section 234(a) (b) and (c) will be included in provision for taxation in statement of profit & loss as per companies act..??
26 September 2017
so what would be the treament of interest on taxes...?? why we cant add the intt u/s 234(b) & (c) in total tax liability since we knew that it will be charged because we had not deposited advance tax as per the rules.
26 September 2017
Interest is not our liability at the time of 31st March. In case you can file the return on or before the due date...
What is the interest amounts position in your books of accounts...?
26 September 2017
Bcoz, the day is ended. Also interest starts on or after the day as 31st March....
26 September 2017
tax = 219597.25
Less: tds= 164290.20
net tax= 55307.05
Add:intt u/s 234(b) &(c)= 6103
so tax liability= 61410.05
this is the position in the books and tax liability i.e 61410.05 is paid on 16th sept 2017
26 September 2017
Interest u/s 234B & C Starts from April not on 31st March. So, provision not applicable on 31st March...
Interest u/s 234A starts on 1st August & (1st October) So, provision not applicable on 31st March
26 September 2017
Provision in Accounting :
*In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement.*
26 September 2017
thank you sir...
26 September 2017
Interest up to the 'date of the balance sheet' (not the end date of the financial year) has to be included in the provision for taxation to be made in the accounts because it is an ascertained liability.
26 September 2017
I agree with Chakrapani Sir. Provision is to be made for ascertained liability and interest u/s 234 B and 234C can be ascertained as on date of preparation of balance sheet
26 September 2017
My dear Experts.,
I can't understand of your views. Please explain it's how do we add the Interest in provision...?
27 September 2017
n what is the treatment of interest in the statement of profit and loss..???
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