Go AD-Free with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Companies act v/s incometax act

Others 724 views 2 replies

Siddharth

Thinker

267 Points Joined July 2011

What are the main differences between Companies Act and the Income Tax Act that lead to a Deferred Tax Asset or Liability?

For eg: Depreciation Rates differ, Preliminary expenses etc.

Can any1 give me a detailed insight on the above with the Rates and all the Differences?

Thank you in Advance,

Siddharth.S

Replies (2)

Sachin Rajput

account exe

593 Points Joined August 2011

Depreciation rate difference as per income tax and company act that's why deferred tax arise.

There are so many items which are allowed/ disallowed in income tax at different time as against the normal accounting practice. It results in timing difference as per as 22. Timing difference are those that arise in one year and get reversed in subdequent years. Consequemntly DTA/DTL has to be recognised. For example Depreciation Prel. Exp sec 43 b where deduction is allowed on payment basis. etc