Dimunition in value of investment

AS 1663 views 1 replies

Dear All,

Whether dimunition in value of investment is timing or permanent difference?

E.g. Suppose, if a company has belief that its long terms investment of Rs. 1 crores are decling and it creates provision for dimunition of Rs. say 10 lacs in books of accounts. However in income tax no deduction is allowed. Whether it is timing or permenent difference as per AS22.

 

Regards

Shweta Maheshwari

Replies (1)
It is a timing difference and deferred tax asset need to be created but only if it is confirmed that long term capital gain if investment is for more than 12 months old and also rate for deferred tax will be 20% as applicable for ltcg. If any further query can ask Virender Gupta 9818968375


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