Is Income tax refund 'income' ? and what will be the entry for the same if there is TDS receivable account in the books and if the same is not there. Pl clear for both company and individual.
Is Income tax refund 'income' ? and what will be the entry for the same if there is TDS receivable account in the books and if the same is not there. Pl clear for both company and individual.
Income Tax Refund is not income, but interest on income tax refund will be income from other sources for both individual and company.
Suppose, TDS of Rs. 10,000 was deducted on the income of the Company/ individual and the tax liability comes to Rs. 8000.
Then, at the time of provision,
(i)Profit & Loss A/c Dr 8000
To Provision for Income Tax A/c 8000
When the Asset Order will come and refuund of Rs. 2100 (Interest on refund Rs. 100),
Provision for Income Tax Dr. 8000
Income Tax Refundable/ bank Dr 2100
To TDS 10000
To Interest on Income Tax 100
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