Rule 33 — GAR
Original Rule Text
33. Classification and accounting of transactions pertaining to more than one Major Head of Account
For: the: sake of convenience or for other special reasons, receipts on charges pertaining to more than one head of account may be booked in the first instance under one of the heads concerned, but the portion creditable or debitable to the other head or heads involved should be transferred from the former head to the latter before the: accounts of the: year are closed. A few instances are cited below:-
(1) Where the charges for: the: supply of water from Irrigation canals are consolidated with the land revenue demand, the recoveries at the consolidated rates are, in the first instance, credited to the head' "0029- -Land Revenue" and an approximate amount calculated as the: share due to Irrigation is transferred to the relevant Irrigation Revenue Head.
(2) Charges for collection of Corporation Tax are accounted for under the minor head "Collection Charges- Income Tax" below the major head "2020 Collection of Taxes on Income and Expenditure" in the first instance, the amount debitable to the minor head "Collection charges- Corporation Tax" being transferred later from the former minor head to the latter.
(3) The Establishment and Tools and Plant charges of Public Works Divisions are, in the first place, booked under: a single Major Head subject to final apportionment among the several
major heads concerned.
What This Means
Rule 33 deals with a practical accounting challenge: sometimes a single payment or receipt legitimately belongs to more than one head of account, but it is not convenient (or even possible) to split it at the point of collection or payment. This rule provides the solution: book the entire amount under one of the heads first, and then make a transfer before the year's accounts are closed to move the correct share to each other head involved.
The rule uses three concrete examples to illustrate the approach. In the first, when irrigation water charges are collected together with land revenue, the collector banks the full amount under the Land Revenue head initially. At the end of the period, an approximate share calculated for irrigation receipts is transferred to the relevant Irrigation Revenue head. This avoids the practical problem of requiring collectors to split every payment at source. In the second example, Corporation Tax collection charges are initially booked under the Income Tax collection head, with the Corporation Tax share being transferred across later. In the third, Public Works Division costs (establishment and tools/plant charges) that serve multiple functions are initially booked under a single major head, then apportioned among all the relevant major heads.
The critical compliance requirement is timing: these transfers must happen before the accounts of the year are closed. An accounts officer cannot carry an unresolved multi-head entry into the next year. This ensures that the annual accounts give an accurate picture of what was received and spent under each head.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1When a single transaction spans multiple heads of account, it may be initially booked under one head as a matter of convenience.
- 2The shares creditable or debitable to the other heads must be transferred before the year's accounts are closed — this cannot be left outstanding.
- 3Example 1: Mixed irrigation-and-land-revenue collections — full amount credited to Land Revenue initially, then irrigation share transferred to the Irrigation head.
- 4Example 2: Corporation Tax collection charges — first booked under Income Tax collection, then the Corporation Tax share is transferred.
- 5Example 3: PWD establishment and tools/plant charges — booked under one major head initially, then apportioned across all relevant major heads.
- 6The year-end deadline for these transfers is firm — accounts cannot be closed with unresolved multi-head amounts.
Practical Example
The Revenue Department of the State of Madhya Pradesh collects land revenue and irrigation charges as a combined demand from farmers. During the kharif season, Collector Suresh Tiwari of Hoshangabad district collects Rs. 45 lakh in combined dues. For accounting convenience, the entire Rs. 45 lakh is credited to '0029 — Land Revenue'. The district's accounts records note that approximately 30% (Rs. 13.5 lakh) represents the irrigation component based on the prescribed formula.
By February (two months before the March 31 year-end), the Accountant in the district treasury initiates the required transfer. He raises a transfer entry moving Rs. 13.5 lakh from '0029 — Land Revenue' to the relevant Irrigation Revenue head ('0701 — Major and Medium Irrigation'). The transfer is completed and the accounts for both heads are reconciled before March 31. If this transfer were not made before year-end close, the Irrigation Department's accounts would understate its receipts and the Land Revenue head would overstate receipts — both heads would be inaccurate, creating audit observations.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.