Treatment of Tax Refund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2010 How to give treatment of Tax refund?

Details as follows:A Y 2006-2007

Income Tax Liability Rs 9000
TCS RS 50000
Income Tax Refund Rs 41000.
Refund has been made in year F Y 2009-2010 Rs.43000 ( Inclusive interest)
How to give treatment in tally for F Y 2009-2010.Also in which head income tax refund is to be treated?

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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25 August 2010 Bank A/c Dr 43000/-
Income tax Refund cr 41000/-
Interst on IT refund Cr 2000/-

Interest on IT Refund is indirect income which is taxable.

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CA Kalpesh Gokani

CA Kalpesh Gokani (Expert)
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25 August 2010 Give treatement in Tally as follows.
Bank A/c Dr. 43000
IT for 2006-07 or Provision for Tax Dr. 9000
To Interest on IT Refund Cr. 2000
To TCS Cr. 50000

Income tax refund is not taxable but interest on refund is taxable under income from other sources.

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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25 August 2010 If you have not adjusted Provision and tcs in FY 2005-06 and balance are c/f as it,
then entry will be passed as per Mr. Kalpesh Gokani.

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2010 These is commom entry..hw to treat further if porvision of tax liability is not made in A Y 2006-2007?

CA Kalpesh Gokani

CA Kalpesh Gokani (Expert)
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25 August 2010 Tax for Prior Period Dr. 9000
Bank Dr 43000
To TCS 50000
To Int 2000

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2010 No entry in A Y 2006-2007 of tax liability is made.So how to treat it now?

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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25 August 2010 iT MEANS IN FY 2005-06 , IN BOOKS ONLY TCS IS STAND RS. 50000/-

NOW

Short/Excess Provison Dr.9000/-
Bank DR. 43000/-
To TCS 50000/-
To Interest on IT Refund 2000/-

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CA Kalpesh Gokani

CA Kalpesh Gokani (Expert)
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25 August 2010 Then as suggest by Mr. Bijendra ji.

Bank A/c Dr 43000/-
Income tax Refund cr 41000/-
Interst on IT refund Cr 2000/-

then where did u accounted TCS????????