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Prior period

Pragya (CHARTERED ACCOUNTANT) (104 Points)

20 November 2015

Hello all,

Assessee has paid entry tax of a.y. 11-12 and 12-13 in a.y. 2015-16. Will it be covered under prior period item? As definition of prior perior says, " income or expenses which arise in current year as a result of error or omission in prepartion of financial statement of one or more prior periods."

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5 Replies

Piyush Tanwar (Assistant Manager - Accounts) (1432 Points)
Replied 20 November 2015

Yes it will be considered as prior period items.
& the same will be debited in the P&L Account

Regards

Piyush Tanwar

M - 9717468521

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Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 20 November 2015

Are you talking about inlcome tax or accounts? Kindly clarify because prior period items as per AS will not always be allowable as per income tax act. There is no assessment year and financial year in accounts.

Nitin Gupta (Student CA IPC / IPCC) (193 Points)
Replied 20 November 2015

As per income tax it is covered under prior period item and not allowed

Pragya (CHARTERED ACCOUNTANT) (104 Points)
Replied 20 November 2015

I am talking about tax..section 43b says tax expense is allowed on payment basis only if otherwise allowable. But in this case provision in books was not made in earlier years. So it wont be allowed as it is a prior period item?

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 20 November 2015

Duty paid is allowed on payment basis except income taxes. It will be allowed now on payment basis. This disallowance attracts only if taxes are hitting p/l. So if you not calimed any tax as an expense in earlier year same can be claimed now. Because if you had claimed in return same would have been disallowed which is the same as not caliming it.