06 June 2012
Tax refund is not an Income you can credit the a/c head income tax refundable if you have created it or in proprietorship / partnership can be adjusted in drawing
06 June 2012
The following is the whole chain of transactions:
1. Advance Tax Advance Tax AY A/c Dr To Bank
2. TDS Bank A/c Dr TDS Receivable A/c Dr To Debtor
3. Provision for Income Tax P&L A/c Dr To Provision for Income Tax
Let us assume the following figures: Advance tax - Rs. 10 lakh TDS - Rs. 20 lakh Final tax liability - Rs. 15 lakh Refund - Rs. 15 lakhs
4. Refund Provision for Income Tax A/c Dr 15 lakh Bank A/c Dr 15 lakh + Interest To Advance Tax 10 lakh To TDS Receivable 20 lakh To Interest on Refund
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