Deferred Tax arose only for timing difference of Company books and Income Tax. Since it is the loss which can be set off future year. Moreover, the loss not affect your tax liabilities. Be clear what is deferred tax and when it will be affected or arised in your books.

Regards

Mari sankar C

ok thanks

when u carry forward unabsorbed depreciation /losses these wud be set  off against future taxable income resulting in lower taxable income and lower  tax  in future.According to accrual concept on which AS--22 is based since  saving of tax in future willl be due to loss of current year , hence should be recognised as DTA in current year.

Thank you sir,

But how to calculate DTA for newly incorporated company having losses.

Dear Babu ,

A newly incorporated company will have to estimate whether it wud have sufficient taxable profits against which the unabsorbed depreciation /Losses can be set off . For ur reference i quote relevant PARA of AS -22 

(1)_When there are  no unabsorbed depreciation or losses

Para: 15: Except in the situations stated in paragraph 17, deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

vide Para 17, Where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets should be recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized