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| This query is : Resolved
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Author : Anonymous
( Author ) 09 August 2012
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what will be effect of deffered tax on depreciation.
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CA CS Amit S. Kedia
( Expert ) 09 August 2012
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Generally, deferred tax liability is created on the depreciation and it gets reversed in the future years
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CA CS Amit S. Kedia
( Expert ) 09 August 2012
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This is because in case on income tax act WDV is followed and depreciation rate is generally higher as compare to rate prescribed under companies act.
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CA Amit Jaiswal
( Expert ) 09 August 2012
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It is depreciation that affects Defffered Tax, not the vice versa.
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CA Amit Jaiswal
( Expert ) 09 August 2012
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The amt will depend on the differece between Dep as per IT Act and Dep as per Books.
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Author : Anonymous
( Author ) 09 August 2012
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if net profit is rs. 7,00,000/-
deferred tax credited to p/l a/c is rs. 50,000/-
what will be business income?
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CA CS Amit S. Kedia
( Expert ) 10 August 2012
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Deferred tax is part of Provision for current tax- It is presented in P&L like-
Net profit before tax XXXX Less: Provision for tax Current tax XXXX Deferred tax XXXX Net Profit after tax XXXX Accordingly, Net Profit 700000 Less:- Current tax XXXX Deferred tax(50000) Net Profit after tax 750000
Note:- Current tax is not computed
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Author : Anonymous
( Author ) 10 August 2012
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Sir, read my question carefully, i wrote deferred tax credited to p/l BUT NOT DEBITED.
U CALCULATE ABOVE AS IT IS DEBITED?
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CA CS Amit S. Kedia
( Expert ) 10 August 2012
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That is why I have added. Pls look my answer very carefully. The amount shown is in bracket. it is always shown like this only.
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