Sir,
Please suggest below provision for income tax is correct or wrong in books of account in proprietor firm
Capital account Dr.
provision for income tax Cr (current liability)
P/l a/c dr
to provision for income tax a/c
3 Replies
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 16 January 2021
Income tax paid gets disallowed while computing taxable income. so in case of proprietary concern it can be shown as drawings. however for better understanding of financial statements, IT, can be shown as debited to P&L.
Krishna Chaudhary
(Accountant)
(4531 Points)
Replied 16 January 2021
Yes correct. you have transfer ur personal income tax in capital ac
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