Question

Name the item out of the following which is shown as Short-term Provision:

Options

• Provision for Tax

• Interest Accrued but not Due

• Employees’ Provident Fund

• Interest Accrued and Due

Answer 1

Provision for Tax

Explanation:

Under Schedule III of the Indian Companies Act, corporate income tax liability is calculated annually and must be paid to the government within the next fiscal year. Because this obligation is expected to be settled within 12 months, it is strictly classified as a Short-term Provision under Current Liabilities.