Accounting entries for it provision

This query is : Resolved

Guest

Guest (Querist)

16 August 2011 Hallo everybody,

As per assesment order if the company is paid tax more than the provision than how to adjust the tax paid amount ?

Is it a prior period item ? if not what is the treatement ?

Preety Parik

Preety Parik (Expert)
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16 August 2011 I guess a IT refund is due to you. only when u receive the amount of refund, credit the amount received as IT refund to P/L account and deduct the same in computation of income for the year in which It refund is received.

2. Only interest on refund shall be offered to tax.

Guest

Guest (Querist)

16 August 2011 No company paid excess amount than provision created. Ex: Provision for tax (IT Payable)50,000/- and as per assesment order company paid again 20,000/-

So the above 20,000/- what is the treatment ?

I think the entry will bw

Reserves A/c dr 20,000
to Provision for Tax 20,000

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