I am facing difficulty in AS 22. I am studying AS on self study basis.
1. I understand that DTA helps us pay lesser tax in nxt years & DTL needs us to pay more tax in later years.
Is this correct?
2. How to identify DTA & DTL? Pls tell me the logic. I cant identify whn it comes to uncommon items!
Thanks
First, we pay the income tax on the book profit basis, therefor income tax calculated on the net profit basis might be diffferent.
Suppose,
we pay income tax on the basis of Book profit (Calculated as per provision of income tax) is 300000/-
and profit as per profit and loss account is 200000/-
Hence income tax will be:-
as per book profit =300000*30%=90000
as per Profit and loss statement =200000*30%=60000
Balance =30000
It means we have paid excess tax over tax (on the basis of profit and loss statement), Therefor we have to create a DTA.
for DTL Vice versa
| Considered in P&L | Considered in IT | Profit | Tax | Deferred Tax | |
| Expenditure | Yes | No | More profit as per IT | More Tax paid as per IT | Create DTA |
| No | Yes | Less profit as per IT | Less Tax paid as per IT | Create DTL | |
| Income | Yes | No | Less profit as per IT | Less Tax paid as per IT | Create DTL |
| No | Yes | More profit as per IT | More Tax paid as per IT | Create DTA |
thanks to both
CAclubindia
