Income tax refund
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 August 2010
Our company has received income tax refund for AY 07-08.
Can you please tell me how to account it?
Below is the procedure.kindly confirm whether it is correct?
1.open income tax refund account under P&L
2. Trf interest on income tax refund to interest recd on income tax refund acount. it will be p&l item.
3.Net of tds, provision and advance tax. whatever balance is pending in income tax refund account is treated as company's exp or loss for the year in which the refund is recd.
4.The above entry needs to be passed in the year in which refund is received.
Can you please tell me how to account it?
Below is the procedure.kindly confirm whether it is correct?
1.open income tax refund account under P&L
2. Trf interest on income tax refund to interest recd on income tax refund acount. it will be p&l item.
3.Net of tds, provision and advance tax. whatever balance is pending in income tax refund account is treated as company's exp or loss for the year in which the refund is recd.
4.The above entry needs to be passed in the year in which refund is received.
25 August 2010
Yes correct, but if any bal remains in tax refund account treat it as excess/short provision of previous year.
25 August 2010
no only interest on income tax refund will be treated as income .
income tax refund may be created under loans and advances
income tax refund ...........dr
provision for income tax ......dr
to advance tax
to, self assessment tax
to, tds receivable
to, interest on it refund
(if there is any differene then it should be adjusted with reserve & and surplus as tax on regular assessment)
interest on it refund .......dr
to, P/L A/C
bank -----------dr
to, it refund
income tax refund may be created under loans and advances
income tax refund ...........dr
provision for income tax ......dr
to advance tax
to, self assessment tax
to, tds receivable
to, interest on it refund
(if there is any differene then it should be adjusted with reserve & and surplus as tax on regular assessment)
interest on it refund .......dr
to, P/L A/C
bank -----------dr
to, it refund
25 August 2010
Agreed with Mr. Sanat..
Interest earned on IT refund is to be treated as Income & Income Tax Refund should be created as part of "Loans & Advances".
Interest earned on IT refund is to be treated as Income & Income Tax Refund should be created as part of "Loans & Advances".
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