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Closing stock
Accountancy
Suppose if sales is not made good but we purchase more goods and the closing stock is higher. So the netprofit is going to be higher then the tax also higher and my question is i I don't have realized profit on sales and it is acceptable?
Answers (6)
If you have not made a profit from sales but have increased your closing stock, you may have an unrealized gain in the value of your inventory. However, unrealized gains do not affect your taxable income, which is based on realized gains or income. And Yes it is can be acceptable
shivaji hari
If you have not made a profit from sales but have increased your closing stock, you may have an unrealized gain in the value of your inventory. However, unrealized gains do not affect your taxable income, which is based on realized gains or income. And Yes it is can be acceptable
Ok then how to show as per income tax act?
Thread Starter
Kamal KumarOk then how to show as per income tax act?
Unrealized gains are not considered as taxable income under the Income Tax Act. Therefore, if you have not made a profit from sales, you will not be required to pay taxes on that income.
shivaji hari
Unrealized gains are not considered as taxable income under the Income Tax Act. Therefore, if you have not made a profit from sales, you will not be required to pay taxes on that income.
But if i had filed gst return then there will be some sales and that time if IT asked?
CA Suraj Lakhotia Admin
If you purchase more goods whcih are not sold both purchases and closing stock would be higher. There is no impact on profit.
Thank u sir, I am not think about GP Which played because stock always measured at cost.
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