Tax libility

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Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2013 Hi,

want to know what is a deferred tax libilty and how it calculated.
Thanks..

Ganeshbabu K

Ganeshbabu K (Expert)
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21 October 2013 REFER BELOW ARTICLE,, IT WILL GIVE YOU GOOD IDEA ON THIS CONCEPT
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https://www.caclubindia.com/articles/meaning-of-deferred-tax-liability-asset-in-simple-words-13385.asp#.UmU0qPmnq3g

CA Pallav Singhania

CA Pallav Singhania (Expert)
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21 October 2013 A deferred tax liability occurs when taxable income is smaller than the income reported on the income statements. This is a result of the accounting difference of certain income and expense accounts. This is only a temporary difference.
The most common reason behind deferred tax liability is the use of different depreciation methods for financial reporting.

A deferred tax asset is the opposite of a deferred tax liability.
Deferred tax assets are reductions in future taxes payable, because the company has already paid the taxes on book income to be recognized in the future (like a prepaid tax).

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