Income tax accounting enteries

if advance tax paid

advance tax

  To cash or bank

if self assessment tax paid

self assessment tax 

       To cash or bank

a) For payment of Adv tax:

Adv tax A/c     5000

         To Bank      5000

b) At the year end, we create provision for tax:

P& L   6000

  To Provision for tax 6000

c) In next year when actual tax is detected and paid:

Provision for tax 6000

       To advance Tax    5000

       To income tax exp  1000

D) when these exp are paid:

  Income tax exp  1000

        To bank           1000

Dear Mr. Surbhi jain

As per your ur transaction, you will pass the following entries.

At the time of Advance Tax Payment
Dr. Advance Tax Paid F.Y: 2016-17 -------------------- Rs.5,000
Cr. Bank/Cash-------------------------------------------------- Rs.5,000

At year ending create Provison of Income Tax.
Dr. Income Tax Payable F.Y: 2016-17 -------------------- Rs.1,000
Cr. Provision for Income Tax F.Y: 2016-17 -------------- Rs.1,000

When Fial Income Tax Paid
Dr. Provision for Income Tax F.Y: 2016-17 -------------- Rs.1,000
Cr. Bank/Cash ---------------------------------------------------- Rs.1,000

Regards

VASU

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