How to Calculate Deffered tax Asset liability or Asset

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kiransingh (Querist)

22 September 2010 A car is sold in loss by a company.
loss claimed under companies Act.
Car Block is continue under income tax act.
how to treat it for calculation of deffered tax.
please explain it with the help of any example.

sudhakar ca cwa

sudhakar ca cwa (Expert)

22 September 2010 In my opinion it is in the nature of temaparary diference only.

Loss on sale of Car - Profit as per companies Act will reduce - DTA

After Sale - Dep as per IT will be more so Profit as per Companies Act is Low - DTA (The answer may be vary bases on date of Sale of Car)

so u need to create a DTA (if other matters will not effects the profits as per IT and companies Act)

once read AS-22 you will get better clarity about this

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CA Navin Jain

CA Navin Jain (Expert)

22 September 2010 Deferred tax would be calculated on difference on depreciation amount as per companies act and as per income tax act.

Example as per companies act. two car wdv of rs. 4L and during the year one car is sold and dep is come rs. 1L

AND AS PER INCOME TAX ACT WDV OF RS. 3L AND DEP IS COME RS. 50K

THEN DEFERRED TAX ASSETS WOULD BE RECOGNISED ON RS. 50K (IL - 50K dEP.)

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