Provision for income tax entry for previous year

Fact of the Case:

1. Entry passed for Income Tax Provision done in 2008-09 for Rs. 200000/-

Income Tax A/C                                               Dr.       200000/-

         To    Provision for Income Tax             Cr.       200000/-

2. Actual Liability arise for Rs. 175000/-, Entry passed in 2009-10

Provision for Income Tax                              Dr.       175000/-

         To    Bank                                               Cr.       175000/-

Balance Rs. 25000/- is still standing in Books.

How should i clear the provision amount :-

1. Adjust the amount against Capital account? or

2. Showing it as Prior period item as Income and clear provision amount? or

3. Any other impact can be given? please let me know.