AS-22 Taxes on Income

This query is : Resolved

GANESH DURAI IYER (Querist)
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29 October 2008 Sir, I have a query. Please help

There are 3 Balance Sheet Items:

As per Books As per tax basis

Equipment 2 Lacs 1.20 Lacs

Prepaid
Insurance 75,000 NIL

Warrant
Liability 50,000 NIL

Kindly help me to calculate the DTA / DTL?
The tax rate is 40%.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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30 October 2008 1) How can there be a difference in equipment cost?
2)Treatment for Prepaid insurance and warranty as per books and IT will be same

CA Bosu babu

CA Bosu babu (Expert)
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31 October 2008 Prepaid and warrant liability are in the nature of Asset & liability respectively. which will not route through P&L account whether in this yr or in the next year(No timing or permanent diffe). so those two will not attract for DTA /DTL.

The only item which attracts DT is Depreciation. i wil explain wit this example....
Cal'n of DTA/DTL:

Net profit as per P&L (say) 100,000.00
Add:
Depn on equipements as per Cos act(say 13.61% on open WDV 2Lacs) 27,220.00

Less:
Depn on Equipent as per IT on Open WDV of Rs.1.2 lacs @ 15% 18,000.00

Net Profit for DTL caln 109,220.00

IT payable as per Cos act(100000*33.99/100) 33,990.00

IT payable as per IT act(109220*33.99/100) 37,123.88

DTA (IT as per IT act - IT as per Cos act) 3,133.88

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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31 October 2008 But the queriest says equipment cost being different!

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