Deferred tax on ROU assets

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If there is any applicability of deferred tax on right of use assets.How the calculations to be done and how it shall be presented.
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Yes , Deferred  Tax on right  to use on asset  is  applicable ., either deferred tax asset  or  deferred  tax  liability . 

For  example  , Company  has taken an asset  for right to use  on lease   of Rs 2000000/-  for  five years , Depreciation  will be  on SLM -striate Line Method -  in equal  installment   ,and  lease  rent will  be 150000/- per Annam , interest  rate is 5% . Tax rate is 30%  . Calculation for  Deferred  Tax as  follows   . Tax department  will  not  recognize  Depreciation  because right to use as asset on lease  , and  allowed  Lease rent  as deduction   . 

                                                       As per  the books                      As per Tax department 

Right  to use an asset                      2000000                                200000

Less -Depreciation                             200000                                                               

Add- 5% Interest on lease rent                                                        100000

Less - Lease Rent                                                                            150000

                                                        --------------------                        ---------------------

                                                         1800000                                1750000

 

Difference                                        1800000 less 1750000 = 50000/- 

Tax 30% on 50000                           15000

So  15000 is  Differed  Tax Asset  .   

 

 


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