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TMI BlogTreatment of Year-End Provisions for Expenses in ITR FilingX X X X Extracts X X X X X X X X Extracts X X X X ..... Treatment of Year-End Provisions for Expenses in ITR Filing X X X X Extracts X X X X X X X X Extracts X X X X ..... ly following a practice of creating year-end provisions for expenses where either the vendors are not identifiable, the exact amount is not known, bills have not been received, or invoices haven't ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been processed for payment/credit before closing the books of account. These provisions are then reversed on the first day of the following financial year. When the actual invoices are received in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he next year, the company books the expenses accordingly and deducts and remits the applicable TDS at that point. In this context, I have the following questions: a) At the time of filing the ITR, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should the company disallow 100% of such provisioned expenses where invoices are still pending? b) If it is certain that the invoices will be received, but only after the ITR filing due date, can th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company opt to disallow only 30% of those expenses under Section 40(a)(ia)? c) Additionally, in cases where the invoice value received after filing the ITR is lower than the amount originally prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isioned, what would be the appropriate remedial action for the company? How should the excess provision be treated in the books and from a tax compliance perspective ?
Regards,
S Ram X X X X Extracts X X X X X X X X Extracts X X X X ..... Forum - Knowledge Sharing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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