| Balance Of Fixed Assets As per Companies Act | 2,613,632.63 |
| Balance Of Fixed Assets As per Income Tax Act | 3,781,343.75 |
| Inadmissible expenses | |
| Gratuity and Leave Salary | 613,964.00 |
please calculate deferred tax.
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Calculation of Deferred Tax Asset
Hello sir,
Please explain in first method what to recognise in P&L and what shall be shown in Balance sheet
What is the purpose of providing Deferred tax
Kinldly Explain How can i Calculate DTA/DTL by using Balance sheet approch For Gratuity??
Hi,
By Computing differences in Gratuity allowable/payable as per IT and companies Act.
| COMPUTATION OF DEFERRED TAX | Amount (Rs.) |
| As per Accounting Standards-22 | |
| TIMING DIFFERENCES | |
| Gratuity allowable/payable as per Income Tax Act v/s Companies Act | |
| Gratuity allowable/payable as per IT act | 25,000,000 |
| Gratuity allowable/payable as per Companies Act | 33,000,000 |
| Difference | 8,000,000 |
| Tax thereon @ 30.9% | 2,472,000 |
| Deferred Tax Liability since AI >TI | 2,472,000 |
| Deferred Tax Asset of Last Year | 257,600 |
| Adjusted Deferred Tax Liability | 2,214,400 |
In the above example, Gratuity allowable/payable as per IT is less than Gratuity allowable/payable as per companies act hence profit as per income tax is less than accounts. So deferred tax liability of Rs. 24,72,000 will be created in books. Since last year we already have DTA, so this liability is adjusted with last year asset and only deferred tax liability is Rs. 22,14,400 charged in profit and loss account, but full Rs. 24,72,000 will be shown in balance sheet.
You can follow any one of the method, but once you started following one method don’t change it in next year, otherwise it will give incorrect results.
Also, you can follow the link mentioned below by the IT Department which is quite unique and simple to apply:
https://www.incometaxindia.gov.in/Pages/tools/deferred-tax-calculator.aspx
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