Accounting Entry

This query is : Resolved

rakesh (Querist)
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22 April 2009 Suppose we make provision for income tax receviable in last year Amounting 100 and we got refund in current year amounting Rs. 75 so what will be the treatment for Rs.25 which receviable for last year.

Please let me know that Thanking you

In my opinion it should be treated as expenses as provision written off

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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22 April 2009 Book the same into current year and note It is not prior period item

CA. Mahesh Agarwal

CA. Mahesh Agarwal (Expert)
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22 April 2009 ya correct, it is current year expense as TDS receivable written off.

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Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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22 April 2009 Similar to any other income receiveable, which is not recoverable, it will be debited to P/L account (not P/L Appropriation ) this year.

Bank A/c_____________________________Dr. 75 Lacs
To Profit & Loss A/c ....................25 Lacs
To Provision for Income Tax Receivable.... 100 Lacs

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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22 April 2009 Accounting entry for the refund

Bank A/c................Dr 75
Provision for Tax A/c...Dr 100
To Advance Tax/TDS Receivable A/c 175

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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22 April 2009 Accounting entry for the refund

Bank A/c................Dr 75
Provision for Tax A/c...Dr 100
To Advance Tax/TDS Receivable A/c 175

Brij Bhushan Sangal

Brij Bhushan Sangal (Expert)
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23 April 2009 I think correct entry may be

Bank account Dr 75
P& L Account Dr 25

To Provision for income tax receivable 100

reason behind this receivable of income tax is current assets and in Dr (Assets) side of balance sheet and now for clear this should be credited.

If any one have differant view, please mentioned.

rakesh

rakesh (Querist)
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24 April 2009 A big big Thanks

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