Deffered tax
This query is : Resolved
16 October 2011
What is a deffered tax? & how it will
reflect in final accounts.
reflect in final accounts.
CA SUMiT PATWARi
(Expert)
16 October 2011
Deferred tax is computed to reconcile the tax provsion as per the income tax act and as per accounts.
When we compute income tax liabiility we take into account the income tax provisions. Hence we take depreciation as per income tax act istead of depreciation as per accounts, we give effect of amounts to be allowed as deduction on payment basis, etc.
Hence we provide for theses differences in our books of accounts (only for those arisiing on account of timing differences) as deferred tax asset/liability.
DTA arises if if have been allowed less amount as deduction in IT act than against provided in accounts. This disadvantage on account of timing difference can be claimed in future years in IT Act. Hence we recoginse an asset.
DTL arises when we have have got more deduction in computing taxable income than as provided in books of accounts - like deprection.
When we compute income tax liabiility we take into account the income tax provisions. Hence we take depreciation as per income tax act istead of depreciation as per accounts, we give effect of amounts to be allowed as deduction on payment basis, etc.
Hence we provide for theses differences in our books of accounts (only for those arisiing on account of timing differences) as deferred tax asset/liability.
DTA arises if if have been allowed less amount as deduction in IT act than against provided in accounts. This disadvantage on account of timing difference can be claimed in future years in IT Act. Hence we recoginse an asset.
DTL arises when we have have got more deduction in computing taxable income than as provided in books of accounts - like deprection.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst credit note by supplier
- Reward for festival
- 18% Rent a cab
- Missed uploading GST Invoice
- Movement of goods by packers and movers - type of sale - Reg.
- Gratuity paid to legal heir above 20 lakh is taxable or not
- Closer of business and itc of capital goods
- RCM and same line
- ARCA LOGIN
- Accounting Treatment of Civil work to install PORTA Cabin for office use
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
- ITC not to be taken in accounts & GSTR-3B
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
