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Treatment of income tax paid & advance tax for partnership

Shrinidhi Rao Karval (Article Assistant) (158 Points)

07 June 2013

How to treat Income tax paid for last year and advance tax paid for Partnership Firm?????. I mean under which accounts head???

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3 Replies

Savad (Audit Assistant) (46 Points)
Replied 07 June 2013

head means income tax head or accounts head.

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veeru sagar (BBE,M.com,CA Final ) (468 Points)
Replied 07 June 2013

the advance tax is piad by the partnership firm show in loan and advances( Assets side) and income tax paid for the previous year deducted from the provision had made in the last year and shown as provision for taxation

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Sourav Yadav (Article Assistant) (789 Points)
Replied 25 May 2015

Tax paid for last year shall be debited to partners capital account, as income tax is connsidered as a personal expenditure in partneship. Advance tax paid will be shown is assets side until the assessment is done and final computation us made. Advance tax will then be transferred to tax paid account which will further be debited to partner's capital account in the year of assessment.

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