Deferred tax recognition.

This query is : Resolved

Akhilesh Chokhani (Querist)
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26 July 2012 If in the initial year of company we did not recognize DTA (Business loss and Unabsorbed Depriciation), in FY 11-12 the company has earned profit; now what should be done?
AS per IT ACT there is NIL profit because set off and as per MAT there is some profit.

Sanjay Chauhan (IFRS)

Sanjay Chauhan (IFRS) (Expert)
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27 July 2012 Had you created deferred tax asset, it would have reversed in FY 11-12 as a debit in Tax expense.

Since there was no asset, there will be no reversal and to that extent the efective tax rate for FY 11-12 will be lower.

You may create deferred tax for the balance unused c/f losses and further reduce the effective tax rate.

Akhilesh Chokhani

Akhilesh Chokhani (Querist)
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28 July 2012 thank you Sir.