defferd tax assets

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rajesh (Querist)
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18 May 2009 please guide me regarding calculation of Deferred tax. Following are the details.
Depriciation as per co. act = 22223
Depriciation as per IT act = 94078
Provision for leave salary = 194673
Provision for doubtful debts = 20186
Prepaid expenses = 14102
Thanks

jegannath G

jegannath G (Expert)
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18 May 2009 dIFFERENCE OF INCOME TAX DEP & COMP. ACT DEPRECIATION WILL ALONE QAULIFY FOR DEFERRED TAX COMPUTATION. hENCE 71855*33.99% =24424 NEEDS TO BE CREATED AS DEFERRED TAX LIABILITY.

ALL OTHER ITEMS WILL QUALIFY FOR DEFERED TAX ASSETS , WHICH WE NEED NOT ACCOUNT IT FOR ON PRUDENCE BASIS

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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18 May 2009 Depreciation as per Co. Act - 22223/-
Provision for leave salary - 194673/-
Provision for doubtful debts - 20186/-
Less:
Depreciation as per I.T Act - 94078/-

Difference: 143004/-

Accounting Profit is > Income Tax Profit.

Hence deferred tax asset will be created of (143004*33.99%)-48607/-.

If the taxable income of the company is less than 1 Crore, the tax rate will be 30.90% and calculation will be done accordingly.
Prepaid expenses is of no relevance.

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