Deffered Tax Liability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2010 Sir,
I Have done Audit of Pvt Ltd Company Where Mat Provisions applied.
My Ques is that, since the 15% Rate applied on Book Profit, then Whether Deffered tax Liabilty Created By 30% or 15%.

CA Navin Jain

CA Navin Jain (Expert)
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25 September 2010 if book profit of Rs. 100000 and income tax profit is nil then mat liability is rs. 15300 and deferred tax liability is rs. 30600

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2010 Sir
it means d.tax Liab has Been calculated as normal rates of income tax (co.) @ 30.9%.not 15.45% of MAT.

CA Navin Jain

CA Navin Jain (Expert)
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25 September 2010 yes

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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25 September 2010 Deffered tax Liabilty create by difference by using regular rates (AS-22).

shakuntala chhangani

shakuntala chhangani (Expert)
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26 September 2010 Hi, as per Interpretation No. 6 of AS 22, in a period in which a co. pays tax under 115JB, DTA or DTL in respect of timing differences arising during the period, tax effect of which is required to be recognised under AS 22, should be measured using the "regular tax rates" and not tax rates under 115JB. In the answer given by CA Navin Jain above, the deferred tax liability will be 30,600 only if the whole difference is due to timing differences.
Regards, CA Shakuntala Chhangani

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