DTL

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S.Jegadeesan (Querist)

24 August 2010 Dear Sir,
I wish to clarify one doubt regarding DTL/DTA.
i.e. M/s.KPL Pvt ltd has incurred Loss as per P & L A/c for Rs. 500000 in F.Y.2009-10.Depreciation as per IT Act is Rs.70000 & as per Companies Act is Rs.45000/-.What will come i.e DTA or DTL?.This company already has incurred ubabsorbed Business for Rs.20000 & Unabsorbed depreciation for Rs.15000 which was B/f from F..Y.2008-.
Should I consider past years unaborbed loss while compute the DTL/DTA?

S.Jegadeesan

Aditya Maheshwari

Aditya Maheshwari (Expert)

24 August 2010 Here there are two things to make deferred tax of.

First is of difference of depreciation as per books and IT and second of carry forward losses as per Income Tax Act.

In the first case since depreciation as per Income tax is more deferred tax liability will be made on the difference of depreciation.

For unabsorbed business loss and depreciation deferred tax asset will be made.

However making deferred tax asset is subject to that where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets should be recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised and the nature of the evidence supporting the recognition of deferred tax assets should be disclosed, if an enterprise has unabsorbed depreciation or carry forward of losses under tax laws.

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