Deffered tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 April 2012
Sir
Please define me the deffered tax and how it treated in balance sheet.
thanks
mukesh kumar
Please define me the deffered tax and how it treated in balance sheet.
thanks
mukesh kumar
10 April 2012
Deferred tax is the result of temporary differences between taxable incomes / allowable expenditures as per Income tax act and books of accounts.
Ex: Profit as per books is Rs. 100. But there is liability which will be allowed on payments basis of Rs. 20. Then income as per income tax is Rs. 120 and tax liability is 120*30% (assuming no surcharge & cess) = Rs. 36. But actual income is Rs. 100 on which i have to pay only Rs. 30 as tax. Hence, the difference of Rs. 6 is recognised as deferred tax asset in books.
If it is deferred tax liability, it will be shown after loans in old Sch VI and under long term liabilities in Rev Sch VI.
If it is a deferred tax asset, it will be shown after investments and before current assets in old Sch VI and under non current assets in Rev Sch VI.
Ex: Profit as per books is Rs. 100. But there is liability which will be allowed on payments basis of Rs. 20. Then income as per income tax is Rs. 120 and tax liability is 120*30% (assuming no surcharge & cess) = Rs. 36. But actual income is Rs. 100 on which i have to pay only Rs. 30 as tax. Hence, the difference of Rs. 6 is recognised as deferred tax asset in books.
If it is deferred tax liability, it will be shown after loans in old Sch VI and under long term liabilities in Rev Sch VI.
If it is a deferred tax asset, it will be shown after investments and before current assets in old Sch VI and under non current assets in Rev Sch VI.
10 April 2012
Well explianed by Mr. Kishore
Deferred tax is simply the difference of tax on accounting profit and tax as per income tax profit.
but for recognition purpose, only temporary differences are recognised in the books of accounts.
Temporary difference is the difference which can be settled/adjusted in future years and permanent diff does not have any effect on future income, hence not recognised
Deferred tax is simply the difference of tax on accounting profit and tax as per income tax profit.
but for recognition purpose, only temporary differences are recognised in the books of accounts.
Temporary difference is the difference which can be settled/adjusted in future years and permanent diff does not have any effect on future income, hence not recognised
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 Challan - change of FY 2025-26 to TY 2026-27
- Gst registered proprietorship firm
- Price inclusive or exclusive of GST while made entry in P& L Account
- AUDITOR APPOINTMENT FOR THE YEAR ENDING MARCH 27
- Minimum tax payable to file Updated return
- UDIN ISSUE
- GST ISSUE OF INPUT AND OUTPUT GST
- SALARY CAN BE CAPITALIZE
- GST Intimation due to Government took possession of Business Premises under PPE Act
- Tax rate change regarding
- Non filing of I T Returns
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Starting trading business
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
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
