20 September 2013
Provision for tax Dr...........1000 Excess Income tax A.Y.2012-13..1100 To TDS deducted.....................2000 To Tax Payable......................100
Tax payable...........100 To Bank......................100
21 September 2013
Hello Parul Mam Actually there is no such entry in Bank A/c regarding payment of Income tax bcoz the tax payable is adjusted with the TDS and the net came out is Tax refundable of Rs. 1900. Then in that case what should be the entry.
21 September 2013
Income tax........100 To Tax Payable.........100
Refund receivable Dr.......1900 Tax payable Dr..............100 To Tds deducted..................2000
Provision for Income tax Dr.....1000 To profit and loss account............1000
The last entry is just for reversing the provision you have created. if your tax liability was just Rs.100 then there was no need of creating provision.
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