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+--- Thread: Calculating Tax Paid (/thread-calculating-tax-paid)
Calculating Tax Paid - Shahid_fss - 01-06-2008
Please help me in calculating the amount of tax paid in 2007, from following available info
..........................................................2007................................2006
Tax Payable.....................................327515.............................353869
Current Tax.......................................71416....................................NA
Deferred tax assets...........................0.....................................0
Deferred tax exp.................................98850...................................NA
Deferred tax liabilities.................................104512................................5722
Adv Tax.............................................242082.............................231040
Tax Paid..................................................???
Amount I have calculated is 100272
- kamranACA - 01-10-2008
Dear,
What I construed, you are asking this information for calculating cash flow figure of "income tax paid".
Always remember following formula to calculate it. (You may also make a 'T' account for this purpose
OPERNING INCOME TAX LIABILITY + CURRENT INCOME TAX PROVISION FOR THE YEAR - CLOSING INCOME TAX LIABILITY + CLOSING ADVANCE INCOME TAX BALANCE - OPENING ADVANCE INCOME TAX BALANCE
If you prefer to make 'T' account put on credit side
- opening income tax liability
- current income tax provision for the period/year
- closing advance tax balance
and;
put following on debit side
- opening advance tax balance
- closing income tax liability
and then calculate the balancing figure which will result in income tax paid or refunded.
Now following the above formula
Tax paid
= 353,869 + 71416 - 327515 + 242082 - 231040
= 108,812
Therefore, your answer is not correct. The income tax paid for the period/year is Rs. 108,812.
Always keep in mind that deferred tax has nothing to do with calculation of income tax paid as deferred tax is a notional provision/asset/expense.
Always ignore, deferred tax expense / income, deferred tax liabilities and deferred tax assets in above calculations.
Best regards,
Kamran.
- Shahid_fss - 01-10-2008
Your gues was perfect.
I wanted to calculate tax paid for Cash Flow.
Thanks a lot for your help.
SHAHID