08 December 2010
As per Accounting Standard 22, disclosure for deferred tax should be made separately in the books of accounts. Deferred tax liability is arised due to timming difference. Timing difference means the expenses as per books of accounts may differ as per income tax and such expenses may be reversed in next year. IN other words, expenses allowed in the books of accounts may be disallowed in income tax and allowed in the next year in the income tax or expenses allowed partially in accounts but allowed 100% in income tax. There may be deferred tax liability or asset. if accountin income is more than taxable income and such difference is due to timing difference, then there will be DTL(Deferred tax Liability). If ACCOUNTING Income is Less Than Taxable income and differnce is due to timing difference, then there will DTA ( DEFERRED Tax Liability). Provisions of AS-22 shall not be applied during tax holidays periods. If DTA OR DTL has been provided in the books of accounts then such DTA OF DTL SHOULD be reversed in the next year at applicable rate tax.
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