Book profits

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2012 I have created the Deferred Tax Asset for the F.Y 2011-12.

the Entry is :

Deferred tax Asset A/c Dr Rs. 20,000
To P & L A/c 20,000

The Company has incurred loss in that year say Rs. 1,20,000.

Now , my question is that while calculating the book profits , Do we need to deduct this or not ?

Means Total Book Loss is Rs. 140000 or Rs. 120000

CS, Deepak Pratap Singh

CS, Deepak Pratap Singh (Expert)
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24 September 2012 Dear Friend as according to AS on Taxes it clearly said that if there is probability of set off of DTA then it will be carried forward to the nest year. Now if there is probability to incur profit in next year then it will be carried forward. Thanks

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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24 September 2012 Book Profit does not include deferred tax expense/income. Since, it is part of 'provision of income tax"which is debited to profit & loss a/c and required to be deducted while arriving at book profit as per section 115JB-Explanation1(a).

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Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2012 Ok sir , it means thats Total Book Loss shall be Rs. 140000 ?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 September 2012 Yes.. Book loss will be Rs. 140000.

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