taxes on income

Save Share

This query is : Open

Nandha Kumar Gorige (Querist)

08 May 2016 can we provide for deffered tax asset for the year in which the assessee has incurred a loss from business...???

CA ALOK KUMAR

CA ALOK KUMAR (Expert)

08 May 2016 Deferred tax asset or deferred tax liability is required to be provided in books of accounts as per AS 22, which is applicable on company. There is no relation between loss and deferred tax asset for provision purpose. For any further query you may write us at info@wealth4india.com or call us @9266242424 extn. 1 or 11

Kaushik Joshi

Kaushik Joshi (Expert)

08 May 2016 Dear Querist, Deferred Tax provision is made for any timing effect created and not for a permanent effect. A difference in depreciation as per Co. Act & IT Act is a timing effect hence shall be provided for as a DTL or DTA. Loss is permanent nature. But check whether it is on account of any entries of timing effect or no.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 May 2016 Loss incurred can be adjusted against future profits so it is a timing effect. If you foresee future profits then create Deferred tax asset.