How to account excess advance tax paid

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2010 In a sole trading co. advance tax paid to debited to capital account. How to account in pvt ltd. company. In march 2009 adv. tax was paid totalling to 12 lakhs and on calculation the tax was 10.50 lakhs. How to account the balance 1.5 lakhs this year or in other words, while taking previous year balance to this year the amount is much higher in account package, that is installed. How to show the account. Kindly guide.

kantijain

kantijain (Expert)
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05 June 2010 Dear ????,

The excess of advance tax paid will be grouped under current asset in the co's book of account. u can suitably reflect the same as "Income tax refund due for AY-__" under current asset on the asset sside of the B/S.

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2010 How about the advance tax paid this year. How will be account for in the books. As of now it is shown in asset side as advance tax. once B/S is finalised, how will be show the tax paid and actual tax and also the diffference between the tax paid and actual tax arrrived.

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Rishab Mathur

Rishab Mathur (Expert)
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06 June 2010 In case of companies, the tax paid whether Advance tax, TDS deducted and Self Assessment tax appears in one account i.e. 'Advance Tax paid for AY _____' which is shown in Assets and is countered by account 'Prov. for tax for AY ______' which is created by booking an Tax expense on profits earned on liabilities side. It is only after finalisation of assessment by IT department that these two acccounts are set off