Hi Sir
Please kindly help me how deferred tax arises and it will be shown in Balance Sheet i.e whether to show it as a deferred tax liability or deferred tax asset.
Regards
Naresh
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Deffered tax treatment
Replies (2)
When there is lossess & Unabsorbed depreciation then Deffered Tax assets is created , If there is Profit but Book profit is more than profit taken for Income Tax act due to excess depreciation available as per It act then such liability which will be reversed in future Years will reflect as a Deffered Tax liability.
Both can be created taking the two things in to matter
1) Timing Difference
2) Permanent Difference
Deferred tax liability arise when the It act Depreciation higher than the companies act depreciation. Deferred tax Asset arise when the It act Depreciation lesser than the companies act depreciation.
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how we will treat this as deferred tax assets or liability. Outstanding Liabilities Under Section 43(b) like bonus, sales tax, leave encashment, gratuity and provision for diminiution in value of investment. |
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