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what is mean by deferred tax liability and deferred tax assets? give some clear explanation
Replies (5)
Quick Summary
Deferred Tax Araise due to time difference between accounting income and Taxable Income.
Example depreciation rates are different in companies act and income tax act .
Few expenses in income tax allowed only on payment of Tds where as in accounts expenses without tds also considered
Example depreciation rates are different in companies act and income tax act .
Few expenses in income tax allowed only on payment of Tds where as in accounts expenses without tds also considered
Deferred tax assets means?
Time differences which reduces the taxable income can cause differed tax asset.
Timing difference*31.2% = Differed Tax
Timing difference*31.2% = Differed Tax
Deferred tax liability is a payable in future and deferred tax assets is a advance paying for future credits ? IAM I correct
Balance sheet may reflect a deferred tax asset if it has prepaid its taxes.
So tax will be less in the future to this extent
So tax will be less in the future to this extent
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