Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Income tax paid amount in PL

Himanshu Agarwal (Proprietor) (186 Points)

25 September 2023

Hello,
If client has paid income tax for the FY 2021-22, CAN IT BE SHOWN UNDER EXPENSES SIDE OF PROFIT AND LOSS OR how would it be shown?

Reply
Follow
Share

13 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14536 Points)
Replied 25 September 2023

What is status of your Claint ?. Sole proprietorship, partnership firm, Company or LLP or any other please clarify.

Upgrade to CAclubindia Pro. Subscribe Now!

Eswar Reddy S (CFO- at NHTF) (58259 Points)
Replied 25 September 2023

Income Tax is a liability and which is balance sheet item.

But companies just disclose it sch III format but it is not relevant for IT Computation.

PBT : Profit Before Tax is the base

2 Like

Himanshu Agarwal (Proprietor) (186 Points)
Replied 25 September 2023

Status of client is individual

Aalam Sheikh (CSR) (72 Points)
Replied 25 September 2023

Capital account in case of proprietor

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 26 September 2023

Yes I agreed with Mr Aalam Sheikh

Upgrade to CAclubindia Pro. Subscribe Now!

sabyasachi mukherjee (27105 Points)
Replied 26 September 2023

Income tax paid amount paid in pl

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 26 September 2023

Originally posted by : sabyasachi mukherjee
	Income tax paid amount paid in pl

Super Super..

Eswar Reddy S (CFO- at NHTF) (58259 Points)
Replied 27 September 2023

Income is not an operational expense and generally it's not form part of P and L

2 Like

sabyasachi mukherjee (27105 Points)
Replied 28 September 2023

Income tax paid amount in pl

N. A (JOB) (45 Points)
Replied 28 September 2023

If any amount is withdrawn by the owner for personal use, that is considered as drawing and debited to drawing account. Drawing amount will be deducted from the capital account.

Income Tax paid is a personal expense of the owner, hence this has to be debited to drawings account.

Upgrade to CAclubindia Pro. Subscribe Now!

sabyasachi mukherjee (27105 Points)
Replied 28 September 2023

It is charged to Pl account.
first provision of outstanding liability for tax for current year
pay the provision for outstanding liability for tax.

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 28 September 2023

It's under capital account for proprietor...

Shaw Randolph (2 Points)
Replied 02 October 2023

It is charged to the Pl account. initial provision for outstanding tax liability for current year pay the provision for outstanding tax liability. geometry dash scratch