Journal Entry and Ledger Posting for Advance Income Tax paid through Bank Account.
Advance Income Tax is the tax Liability payable by a Tax Payer within due date prescribed by the Income Tax Department.
It is paid during a Financial Year on estimated Income for that Financial Year.
Advance Tax paid during the Year will be adjusted on Return Filing date against total Income Tax payable.
Now let's discuss on Journal Entry and Ledger Posting, when Advance Income Tax is paid through Bank Account.
When Advance Income Tax is paid through Bank Account, the following Debit Ledger and Credit Ledgers are affected.
Debit Ledger is :
- Advance Income Tax Account
Credit Ledger is :
- Bank Account
Journal Entry
Ledger Posting
In Advance Income Tax Ledger Account.
In Bank Account.
Example :
In the Books of M/s.Trupti Food Products, amount paid through HDFC Bank Current Account towards Advance Income Tax for the Assessment Year 2024-25 on dt.07/09/2023 for ₹50,000/- as per Challan Ref No.542632.
Pass necessary Journal Entry and post them into their respective Ledger Account for the above transaction.
In this transaction,
Debit Ledger is :
- Advance Income Tax Account
Credit Ledger is :
- HDFC Bank Current Account
Journal Entry
Ledger Posting
In Advance Income Tax Ledger Account.
In HDFC Bank Current Account.
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