08 February 2016
firm paid penalty of Rs.85000 for F.Y 2014/15 On 27/05/2015 which is imposed u/s 143, how can i make the entry in tally,as the accounts are maintained for F.Y 2015-16?
08 February 2016
1. It is not a prior period item. AS 5 defines prior period item as income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods. 2. Demand/ penalty imposed is not covered by the above definition. Accordingly it is not prior period item 3. Open a new ledger "Income Tax Penalty" under indirect expenses. You can have any other name also. 4. Penalty paid under Income Tax Act is not admissible as deduction under the Income-tax Act.
12 February 2016
if penalty paid is not admissable so why i claim it as indirect expences, now i debit the penalty from capital account and cr cash is it corect ???????
CAclubindia
