Self Assessment Tax - Accounting and its treatment..Urgent..

This query is : Resolved

Rajesh (Querist)
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12 September 2010 Dear Experts,
Accounting treatment in case of self assessment tax paid is my doubt. I will detailedly explain my doubt down under.

Advance Tax is paid during the year of carrying business itself whereas Self Assessment Tax is paid only after that relevant year in which the business is carried.

In other words for the asst. year 2010-11 the advance tax paid is from 15th June 2010, 15th September 2010, 15th December 2010 and 15th March 2011 in case of corporate assessee. Still if the company has to pay tax means, whatever income tax paid after 31st March 2011 is called as Self Assessment tax so it pays it in the next assessment year (say Asst. Year 2011-12)

1) My doubt is HOW I HAVE TO ACCOUNT THIS SELF ASSESSMENT TAX PAID ON THE ASST. YEAR 2011-12 WHICH IS FOR THE ASSESSMENT YEAR 2010-11 (since as per accrual concept we have to book all the expenses incurred in the year in which it has arisen)

Please explain me detailedly so that i am able to understand.

Thanks for the everyone....

With great regards,
Rajesh.

CA SMR

CA SMR (Expert)
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13 September 2010 Yes,you have to account for self assessment tax on accrual basis in the FY 2010-11.While doing finalisation of accounts for the FY 2010-11,the incometax liability will be determined and accounted.When making payment of income tax, the advance tax is to be adjusted from the incometax payable and the balance will be self assessment tax paid.

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CA Sanat Pyne

CA Sanat Pyne (Expert)
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13 September 2010 FOR THE FINANCIAL YEAR 2009-10.
TOTAL ADVANCE TAX AND TDS RECEIVABLE FOR THE F.Y 2009-10 WILL BE SHOWN UNDER LOANS AND ADVANCE AND TAX PROVISION FOR THAT YEAR WILL BE SHOWN UNDER LIABILITY SIDE.
AFTER ASSESSMENT A SETOFF ENTRY WILL HAVE TO BE PASSED TO SETOFF ADV TAX
FOR EXAMPLE
ADVANCE TAX FOR A.Y 2010-11 – 500000.00
TDS RECEIVABLE FOR A.Y. 2010-11 - 100000.00
TOTAL TAX LIABILITY FOR A.Y. 2010-11 - 700000.00
SO SELF ASSESSMENT TAX PAID ON 30.06.2010 - 100000.00
IN BALANCE SHEET ADV TAX & TDS SHOULD BE SHOWN IN ASSET SIDE UNDER LOANS & ADVANCE
AND TAX LIABILITY SHOULD SHOWN UNDER PROVISION IN THE LIABILITY SIDE.
ON 30.06.2010
YOU SHOULD PASS THE ENTRY
SELF ASSESSMENT TAX ------DR 100000
TO BANK 100000
SUPPOSE ASSESSMENT WILL BE COMPLITED ON 26.10.2012
ON THAT DATE THE ENTRY WILL BE
PROVISION FOR IT………….DR 700000
TO, ADV TAX 500000
TO, TDS 100000
TO, SELF ASSESSMENT TAX 100000

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