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Monday, August 30, 2010

Do you need to make provision of Income tax in books??

provision for income tax in books of accounts is required even if you have tds certificates supporting the calculated refund?




Yes, you will have to make provision . this is because, when you record tds certificates, you show them as assets.



when u will get refund you will have to genuinly show them against this asset.



Making Income tax provision is mandatory as per guidance note and accounting standard also suggests so.



As per schedule v of companies act, you will have to show separately in profit and loss account, any provision for income tax and provision for deferred tax.

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