Deferred tax

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madhu

madhu (Querist)
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07 August 2014 Deferred tax liability of last year which is stand on b/s how to adjust this year..

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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07 August 2014 Hi Madhu,

At the end of each year we calculate the amount of deferred tax liability / asset, and the same will show in balance sheet of relevant year and the difference in the deferred tax liability / asset (closing balance minus opening balance of deferred tax liability/ asset)will be debited or credited (as the case may be) in profit and loss account.

Example,

1.)
Balane of deferred tax liability on 01.04.2013 Rs.5000. And the figure of deferred tax liability as on 31.03.2014 comes Rs.7000, then Rs.7000 will be shown in balance sheet as on 31.03.2014 and the difference Rs.2000 (i.e. 7000 - 5000) will be debited in profit & loss a/c.

2.)
Balance of deffered tax liab.
as on 01.04.2013 Rs.5000
on 31.03.2014 there is deferred tax asset Rs.2000, then difference will be Rs.7000 which will be credited to profit & loss account.

Thansk,
Devanand

madhu

madhu (Querist)
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07 January 2015 thanks but if i want to written off whole figure of deferred tax in this year than what i will do?

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