AS - 22 doubt

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

thanks to both