Deffered tax assets/liability

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Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 Can anyone please explain me about the deffered tax concept. And also tel me if WDV of depreciation as per IT Act is less than WDV of companies act, then is it Deffered Tax ASSET OR LIABILITY

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

25 September 2013 The deffered tax means the difference in tax between as per the IT act as per the books of accounts tax liability.

Yes, in your case you have Deffered tax liability, because of WDV as per IT act is lower than the WDV as per companies act means depreciation as per the IT act is lower than the companies act means tax payable as per IT act is higher than the tax payable as per companies act, so you have deffered tax liability. (Note: it the rate of depreciation as per the IT act and companies act are different then the answer may change depending on the rate of depreciation and value of WDV)

OM SAI SRI SAI JAI JAI SAI

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

25 September 2013 If the tax as per the IT act is higher than the tax as per the books is called deffered tax liability and vice-verse case called as deffered tax asset.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2013 Thank you sir,

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