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Self assessment tax

25 September 2019

self assessment tax was paid for ay 2018-19 by assesee from other than current A/C of business ,how it will be shown in accounts,will it be debited from Capital?

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8 Replies

Suresh Thiyagarajan (Student) (3986 Points)
Replied 25 September 2019

1. If the same was debited from the personal account the name of the person will appear as creditors in the books of accounts. As far as taxes are concerned it does not matter who made the payment.
2. In your case, if self-assessment taxes are paid from other accounts then the person from whose account the payments were made will appear as creditors in your BOA.
Please correct me if the above solution has an alternative view.

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CA Priti Bamal (138 Points)
Replied 25 September 2019

If we consider it payment from business account what will be the treatment

Suresh Thiyagarajan (Student) (3986 Points)
Replied 25 September 2019

Credit to Bank and debit Tax paid account

CA Priti Bamal (138 Points)
Replied 25 September 2019

Treatment in capital ac and balance sheet?

Ajay Neema (51 Points)
Replied 25 September 2019

Self assessment tax ,I am assuming it's income tax liability not a GST liability.My answer to your liability is that it is a personal expense i.e. drawing. It's accounting treatment will be debit drawings/capital account To cash/ SB account /current account.

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shivam hy (yel) (83 Points)
Replied 25 September 2019

Mam as per Income Tax No direct tax expense is allowed as expense in P&L A/C. Only Indirect Taxes are allowed as expenses. (Fees&Taxes) even no penalty allowed.

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Kapadia Pravin (17264 Points)
Replied 25 September 2019

@ Priti
I presume it is proprietory concern.
Tax payment you can debit to Capital account and credit to bank account (assuming payment is made from SB Account instead of Current Account.) In the BS show bank accounts

If the situation is different then elaborate capital account.

Ajay Neema (51 Points)
Replied 25 September 2019

Please correct me in my reply in second sentence the word liability to be replaced by query. And last sentence is ,it doesn't matter from which account payment is made