Deferred tax liability
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 February 2013
how can deferred tax liability/asset not affect tax computation
CA PARAS BAFNA
(Expert)
10 February 2013
1. Income Tax liability depends upon income or expenditure- it is not based on any Asset or Liability.
.
2. Deferred Tax Liability represents the future tax liability of the company which has been deferred to a future date due to favourable tax provisions of today.
3. We may say that the difference of the Book Profit and Profit as per Income Tax Act sometimes generates such assets and liabilities. Hoever, tax has to be paid only on the basis of profit computed as per Income Tax Act.
.
.
2. Deferred Tax Liability represents the future tax liability of the company which has been deferred to a future date due to favourable tax provisions of today.
3. We may say that the difference of the Book Profit and Profit as per Income Tax Act sometimes generates such assets and liabilities. Hoever, tax has to be paid only on the basis of profit computed as per Income Tax Act.
.
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