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.
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
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Difference between Date of Payment and Date of Deduction?
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- Journal entry of busniess expenses
- GST Rate for Catering Services
- TODAY INCOME TAX SITE IS NOT WORKING ANY OFFICIAL EXTENSION
- Cash balance limit and property purchases limit
- Can we choose not to report losses in ITR3 if they cannot be carried forward?
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
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
