Deffred Tax Asset or Liability As per AS22

Following is my sincere attempt to explian DTA and DTL.Please respond in case of Discripency.

Find the timing difference items such as depreciation, prelimnery expenses etc.in the books of accounts. Now find the allowbility as per income tax act. Then find out the net effect and apply rates of income tax. The amount so calculates would be your deffered Tax or liaibility.

E.g. Depreciation as per books of accounts is Rs 100000 and income tax allowed Rs 80000 in this case defferred tax asset of Rs 20000 * rate of tax say 33%

Means Rs 20000 is not allowed as per income tax in current assessment year due to which we paid excess tax of Rs6667 would beour deffered tax asset and would be  allowed in subsequent assessment year.

Replies (5)

Yes Rakesh, you are absolutely right and the concept of DTA and DTL with the Timing Difference appears to be clear.

Can u give me examples on Deferred Tax Asset/Deferred Tax liability if the company impleted it for the first time though incorporated 7 years back.

If in current year any Company has a Business Loss as per Companies Law and as well as Business Loss and unabsorbed Depreciation as per Income tax laws. Apart from Depreciation Timing Difference what would be the treat ment of Loss for Calulating Defered Tax Asset

have you come across a list of  items which need to be considered while calculating DTA/DTL?

i need it urgently (before 27th SEpt,2008)

as 22

 

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