Deferred Tax

Tax queries 165 views 6 replies

rutuja prabhune

107 Points Joined April 2020

How to adjust the Deferred Tax Liability of Previous Financial Year in Current F.Y.

(There is just credit balance reflected on Balance Sheet of Previous Year, no adjustment seems to have made)

Replies (6)

yasaswi gomes

My grammar is 💯 good I

7296 Points Joined March 2019

Supposing if previous year’s Deferred tax liability Cr. In the balance sheet is 1000₹, PBT is 10,000, Current tax rate is 20%, then:

PBT 10,000₹

-2000₹ (10000*20%)

- Deferred tax 1,000

= 7000₹ PAT.

when you have previous years balance as 500₹ provision for deferred tax in SOFP, the:

10000₹

-2000₹

-(500-1000) 500₹

= 7,500₹ PAT.

sanjith kotni

Articled assistant

663 Points Joined November 2015

Hi Rutuja Prabhune -

I made complete analysis with example on deferred tax adjustments solely for your issue..
just visit my blog here.
-https://sanjithkotni.blogspot.com/2020/04/deferred-tax-accounting-as-per.H T M L?m=1

SUSHANT BIDAYE

710 Points Joined May 2017

You need to give more details.

what is the nature of p.y. deferred tax liability and the reason of reversal.

adjustment is simple.

deferred tax expense cr &
def. tax liability. dr.

but the reason needs to be understood

sanjith kotni

Articled assistant

663 Points Joined November 2015

Hi rutuje.
Visitmyblog- sanjithkotni.blogspot.com

I explained in the blog only for your issue.Please visit and get it clarified.And if you have any further doubt comment there or here