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Increase in Tax Liability - Penalty (Andhra Pradesh)

Tax liability due to interest can be adjusted by creating a journal for penalty payable.

To record journal entry to account for penalty payable

1.    Go to Gateway of Tally > Accounting Vouchers > F7: Journal.

Note: You can create a journal voucher from Gateway of Tally > Display > Statutory Reports > VAT > select the VAT or CST form.

2.    Click J: Stat Adjustment. In the Stat Adjustment screen,

o     Select the option VAT in the Type of Duty/Tax field.

o     Select the option Increase of Tax Liability in the Nature of Adjustment field.

o     Select Penalty for the option Additional Details.

o     Press Ctrl+A to save and return to the voucher creation screen.

3.    Debit an expense ledger created under Indirect Expenses, with option Is VAT/CST Applicable? set to Not Applicable.

4.    Credit the ledger created under Current Liabilities. The completed screen appears as shown below:

5.    Press Enter to save.