How do I account for a tax rebate I had received after paying taxes in Zoho Books?
Consider a scenario where you have to pay about £100 in taxes and receive £20 as rebate(commission). In this case, the tax paid to the tax agency would be £80.
To record the tax payment amount £80 (paid to your tax agency), please record an expense with Expense Account as “Tax Payable” and Paid Through your bank account.
Currently, there is no option to record the commission as Income. As a workaround, please follow the steps mentioned below:
- Create an expense for £20 with Expense Account as “Tax Payable” and Paid Through as “Advance Tax”.(This is an intermediate account to transfer the tax payable amount to Income account).
- Next, add a Manual Journal entry with “Advance Tax” and “Commission” (You can also create a new Income account, say, “Commission”) for an amount of £20 for both the accounts.
- Please enter the amount £22 in Debits box for the account “Advance Tax” and Credits box for the account “Commission”.
- Once that is done you can verify this tax payment in the report.
You can learn more about Manual Journals here.