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guys need ur help on income tax refund and adv tax

jamsheed (CA) (61 Points)

11 December 2009

guys i need ur opinion on this...

i am aware that provision for tax and advance tax account shall be shown separately in the balance sheet till the completion of assessmant and shall not be shown as net entry.

but i am not sure what will be the treatment for Income tax refund,whether it should accounted at the time of filing of return if the tax paid is more than tax payable or should it be acoounted after completion of asssessment and on receipt of assessment order.

Also i want to know whether TDS Receivable(2008-09) can be transferred to Advance Tax account(2008-09) after filing of return or should be done so after completion of assessmant.

please reply

thank u in advance

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7 Replies

Amit Ingale (Student CA Final) (1454 Points)
Replied 11 December 2009

as far your second question is concerned one can transfer the amount standing to the debit of TDS to advance tax accoount.

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Prabeer (B. COM (H) CA & CS Final) (5484 Points)
Replied 11 December 2009

Dear Mr. jamsheed Income tax refund means the amount received from the I.T. Dept. (after assessment).

Thus the same should be acoounted after completion of asssessment and on receipt of assessment order.

Jagjeet Singh (ca-final) (174 Points)
Replied 11 December 2009

REFUND SHOULD BE ADJUSTED AFTER COMPELISITION OF ASSESSMENT

AISO TDS IS A PART OF TAX PAID IN ADVANCE LIKE ADVANCE TAX HENCE IT CAN BE TRANSEFERRED TO ADVANCE TAX

IN SHORT ANY AMOUNT PAID AS TAX BEFORE COMPLETION OF PREVIOUS YEAR IS ADVANCE TAX

lavanya l (Awaiting Result) (31 Points)
Replied 11 December 2009

Hi Jamsheed,

Advance Tax paid, TDS (asset), Self Assessment Tax will appear on asset side of Balancesheet and Provision for tax on liabilities side of Balancesheet till the assement is complete. Once the assessment order is received all these above accounts are closed.

During Computation of tax, we know the tax payable/refund due. If its tax payable then we pay self assessment tax, if refund due we wait for the refund from Govt.

Income tax refund always involves interest on income tax refund, which will be recognised as income for the year in which refund is received

1. so till assement order is received , income tax refund entry will not come

2. Its always the best thing to show TDS, Advance tax separately

santoshkumar s.k (article assitant) (40 Points)
Replied 12 December 2009

i agree with lavanya

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firoz ahmad (ARTICLE) (36 Points)
Replied 12 December 2009

I agree withlavanya.

Naveen (Software Professional) (32 Points)
Replied 09 February 2010

Dear, TDS receivable, what does it mean, it means some one/company has deducted the tax against your work/sales and that has paid to Govt. a/c

prior to your assessment you must have an idea about your sales turnover and tax liabilities, if your tax liabilities is more than your TDS amount then paid the advance tax, if it is less/equal then no need to pay advance tax, if you paid advance tax and TDS both then claim your refund while making your Income Tax Return file.

Govt. has specified the advance tax payable date as follows.

Advance tax on the current income calculated in the manner laid down in section 209 shall be payable by—

(a) all the companies, who are liable to pay the same, in four installments during each financial year and the due date of each installment and the amount of such installment shall be as specified in Table I below :

On or before the 15th June: Not less than fifteen per cent of such advance tax.

On or before the 15th September: Not less than forty-five per cent of such advance tax, as reduced by the amount, if any, paid in the earlier installment.:

On or before the 15th December: Not less than seventy-five per cent of such advance tax, as reduced by the amount or amounts, if any, paid in the earlier installment or installments.

On or before the 15th March : The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments.

when you have paid Advance Tax as well as TDS too, then after deduct your tax liabilities and show the rest amount in Assets side (in balance sheet) if excess tax has paid.

hope it will help you