31 August 2013
A Company has following figures at year end :
Advance Tax Paid : Rs.500000 TDS : Rs.100000
Self assessment tax comes out to 50000.
Now what would be entry for income tax provision at 31st March out of following :
1.Profit & Loss a/c Dr.50000 Provision for Tax Cr.50000 (in this Advance Tax & TDS adjusted from Reserves & Surplus)
or
2.Profit & Loss A/c Dr.650000 Provision for Tax Cr.650000
(in this Advance Tax & TDS are shown under Loans & Advances.)
What would be the most appropriate presentation. Whether provision is to be made for net amount(as in (1) above) or for full amount including Advance Tax & TDS(as in (2) above)