Minakshi (Accounts and Business Management) (25 Points)
12 February 2012A client having sole propreitor business has paid self assessment taxes for couple of years but corresponding provision of tax entries do not reflect in his books of accounts. No refund is to be received than can i cr thor se receivable accounts and Dr his capital account??
SUDEEP SHETTY
(CA ARTICLE )
(29 Points)
Replied 12 February 2012
dear friend
You apply AS-5 and sort out the problem.
Shivish Verma
(C A)
(376 Points)
Replied 12 February 2012
suppose tax paid for two years is Rs. 200/-, refundable amt is 20/-
incoem tax refundable a/c dr. 20
capital/ drawing a/c dr. 180
advance tax cr. 200
(assuming that self asst tax is appearing as advance tax in asstes side of ur Balancs Sheet)
Jitesh Golani
(student)
(60 Points)
Replied 15 February 2012
Dear Sudeep, Accounting Standard is not applicable in this case.
It's very simple, any self-assessment tax paid/refund received has to be routed through the Capital account of the assessee. Moreover, tax provisions made are disallowed for tax purposes. So, in sole-proprieter's case, provisional entries are rarely passed as the same would be disallowed. :)
Dhanabal Ramasamy
(CHARTERED ACCOUNTANT)
(105 Points)
Replied 20 February 2012
Dear Friends,
Tax entries are never routed through capital account. Its just like an expenditure. Debit the 'Taxes paid' (indirect expense) account. This is will appear in the profit and loss account as expenditure and will be disallowed u/s 40.
Vaiibhav Gupta
(Founder & Promoter JSR Fincon Inc)
(89 Points)
Replied 22 March 2012
In case of proprietorship concern provisional entries are not passed, Tax /refund has to be touted thru capital account of the proprietor , if u had passed entry before it will be disallowed.
for further queries i can be reachd at vaiibhavgupta @ gmail.com
muhammed shanid
(Accountant)
(35 Points)
Replied 20 March 2019
Sir
I have started working on a company in abroad They have been operating the business from last June 2018 and no accounts or bookkeeping methods have been used till now. I calculated opening stock with available Purchase and Sales of January to March and comparing with closing stock. And I also found the Current Liabilities, Current Assets, Payable, Receivables, Fixed Assets and Depreciation etc.
Currently i am using Tally ERP 9. I have start the accounts from January and when i tried giving Opening balances of Stock in Hand, Cash in Hand,Bank Accounts, Current Assets, Fixed Assets , Current Liabilities etc it showed a difference in opening balances ( i haven't put the capital account amount as i dint got it,Its a sole proprietary , so the closing stocks and everything should automatically adjust with capital account right?)
Read more at: https://www.caclubindia.com/forum/previous-year-closing-balance-in-this-year-opening-186824.asp?offset=1
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