Caclulation of deffered tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 March 2016
Dear Experts,
Assume we have purchase the car Rs. 1 lacs and useful life is 10 year, then dep. As company act. Is 100000 less 5000 as 5% residual value, 95000/10, 9500 per year however as per income tax 15% dep. Is 15000 in this case query.1) weather deffered tax liability or deffered tax assets would be created..2) what would be accounting entry for the same..3) how it will reverse in subsequent year..
Regard
Manoj Gupta
Assume we have purchase the car Rs. 1 lacs and useful life is 10 year, then dep. As company act. Is 100000 less 5000 as 5% residual value, 95000/10, 9500 per year however as per income tax 15% dep. Is 15000 in this case query.1) weather deffered tax liability or deffered tax assets would be created..2) what would be accounting entry for the same..3) how it will reverse in subsequent year..
Regard
Manoj Gupta
25 March 2016
ABOVE EXAMPLE THERE WILL BE DEFFERED TAX LIABILITY
YOU CAN DEBIT P&L A/C dr
CREDIT DEFFERED TAX LIABILITY cr
YOU CAN DEBIT P&L A/C dr
CREDIT DEFFERED TAX LIABILITY cr
25 March 2016
1. Deferred tax liability should be booked.
2. Deferred tax Dr 3090
To Deferred tax liability 3090
(Being DTL @ 30.90% on timing difference)
3. From 8th year on wards reversal begins because DTL will change to DTA.
2. Deferred tax Dr 3090
To Deferred tax liability 3090
(Being DTL @ 30.90% on timing difference)
3. From 8th year on wards reversal begins because DTL will change to DTA.
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