Deferred tax asset/liability

This query is : Resolved

Riyas cv (Querist)
Follow

30 August 2012 Plz solve this.
WDV as per IT = 1152312
WDV as per Companies Act = 1320865
Depreciation as per IT = 577804
Depreciation as per Companies act =409251
Net Loss = 1151085
how to calculate DTA for the first year?

HARI KRISHNA

HARI KRISHNA (Expert)
Follow

30 August 2012 =577804-409251=168553 is the DTA FOR THE YEAR AS PER AS-22

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

30 August 2012 in your case for difference between Depreciation DTL is applicable and in Respect of Loss DTA is applicable

DTL- Rs 52083 (168553*30.9%)
DTA- Rs 355685 ( 1151085*30.9%)

Net DTA Rs 303602 (355685-52083)

Note:for creating DTA on loss there should be convincing evidence that sufficient future taxable income will be available against which such DTA can be be realized.

if you don not have any evidence then only DTL for Depreciation difference can be created.

Riyas cv

Riyas cv (Querist)
Follow

30 August 2012 Dear Mr. Ravikumar, my answer may not matching as i have taken book loss as per IT act, im getting DTA net 355685. to whoom i should rely..?

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

30 August 2012 Please consider the taxable loss under normal provision for calculating DTA.
Book loss has no relevance on DTA because only taxable loss can be carry forward to 8 AY hence DTA should be created on the same.

Book profit is only relevant for calculating MAT.
I answered based on the AS 22
please refer the AS and let me know any clarification or suggestion...

Riyas cv

Riyas cv (Querist)
Follow

31 August 2012 Yes Mr Ravikumar, i calculated according to taxable loss only, that is

Taxable Loss= book loss+Dep as per Companies
act-dep as per IT act
= (1151085)+409251-577804
= (1319638)
DTA = (1319638)*30.9%
= 407768
DTL on Depreciation=(1320865-1152312)*30.9%
=52083

Net DTA= 407768-52083= 355685

Please check my computation and Reply.

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

31 August 2012 Hi Riyas,
Your computation looks correct.

in respect of DTA relating to Loss to be created only if there is a evidence of future profit which is available to set off the loss.

Message likes : 1 times

Riyas cv

Riyas cv (Querist)
Follow

31 August 2012 ok..Thanks for sharing information..

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now