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| *Ostroff, Fair and Company>>>India Taxes |
Can it treat income tax refund as incom? |
can it treat income tax refund as incom Income tax refund is not an income , but remember the interest given by the department u/s 244A of the I T Act which may be included in your refund cheque is TAXABLE in the year in which you receive the refund cheque. Isn't it a reduce in tax expense? It is definitely not an income... No income tax refund can not be treat as income.The reason being is that the refund means Tax collection at source(Tax deducted in advance) - Net tax liability after computing of income. So tax refund is the amount which is paid in extra and it cannt be use as income. it is refund of tax which is not taxable because it has been already YES, INCOME TAX REFUND CAN BE TREATED AS YOUR INCOME in books of accounts - not for the purposes of income tax act. You should remember that accounting is different and Income tax law is different. Income tax law cannot over-ride accounting norms and principles. So go ahead and treat it as your income. But be careful! Is there any receivables shown in assets side relating to Income Tax. IF yes, then first adjust the refund towards that and the excess as your income. |
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