provision for taxation

This query is : Resolved

deepak Kumar yadav (Querist)
Follow

24 January 2009 plz tell me the entry of Provison for taxation in accounts ans effects of entry in PnL Balance Sheet. if adavce tax made during the year we have to make any adjustment with Provision for taxation in Accounts

Vinod Jain

Vinod Jain (Expert)
Follow

28 January 2009 Income tax A/c Dr
To Provision for IT

By this provision, Net profit after Tax will be reduces in P & L A/c

Provision for Income Tax will form part of Current Liabilities

Advance Tax paid will be reduced from Provision A/c and thus net tax liability will be lesser by Advance Tax Amount in Balance sheet