impact of bonus provision on defeered tax

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rajesh (Querist)
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25 May 2009 Bonus paid during the year Rs. 120000 ( for the year 2007-08)
Provision for the bonus made during the year 2008-9 Rs. 140500. ( Which is not yet paid )
What is the imapct of above transactions in the calculation of Deferred Tax.

Kedar Pande

Kedar Pande (Expert)
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25 May 2009 In my opinion, see the following...
Bonus is a 43B item which is deductible on payment basis.
For Ex. lets say tax rate is 30%
You must have created the DTA on Rs. 120000/- say Rs.36000/-
You will reverse this, in current year and will reduce the DAT by Rs. 36000/-

For Rs.140500/- you will be again creating the DTA of Rs.42150/-

The net effect is you DTA will increase by Rs.6150/-

I left the query open for others to reply and comment

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 July 2023 "Sorry, I am not a featured member."

For featured members contact....

https://www.caclubindia.com/catalogue/featured.asp

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