Defferd tax liability & assets in loss making business
This query is : Resolved
kaushik sreekumar
(Querist)
06 October 2014
A company is having loss as per its financial statements. There is a Deferred Tax Liability of 12000 arising due to difference in depreciation rates as per Companies Act & Income Tax Act. Also there is unabsorbed depreciation to the extent of 30000 , but in the companies case there is no enough virtual certainty of adequate future taxable income. My Question is in regard to the deferred Liability , in regard to which can we adjust the unabsorbed depreciation as a deferred tax asset in the current year ?. Or will we have to show the entire depreciation difference as deferred tax liability ?
CA Parul Saxena
(Expert)
06 October 2014
If you have deferred tax liabiity then record if you have deferred tax asset then it is not feasible to record it so avoid it.
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