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.
'Increase in Tax Liability - Penalty (Andhra Pradesh)' has been shared with
