Could you explain Deferred tax asset
and deferred tax liability
Tax on profit as per profit and loss a/c is Tax Liability ( which is prepared based on companies Act)
tax on taxable income is current tax. ( as per income tax act).
ex: tax liability is 100
current tax is 60.
expenditure we are booking in our books is 100. but we are paying to govt is 60. balance is the liability in the hands of tax payer. Deferred tax liability is 35.
in reverse case we will get Deferred tax asset.
CAclubindia
