DTA and DTL

464 views 4 replies

Uday Bhakar

Article Assistant

39 Points Joined June 2018

I would like to ask you about Deffered tax asset and Deferred tax liability.Why we are creating DTA and DTA in our Books of accounts at the time of calculating depreciation as per Companies act,2013 and depreciation as per Income tax act,1961.What is the main purpose of creating those asset and Liability.

I request you to give me overall preview about DTA and DTL i.e., how we will calculate DTA & DTL and what is it's accounting treatment.

Replies (4)

Piyush Shirodkar

CA Final Student

1358 Points Joined January 2011

It's very big concept.
Cannot be explained over here.
Better refer AS 22.
You will get your answers.

Uday Bhakar

Article Assistant

39 Points Joined June 2018

Ok...Thank you.

Then tell me,what is the main purpose of recognising DTA and DTL.

Sandeep Garg

Consolidation and IndAS Application

1056 Points Joined May 2010

for understanding the concept of DTA / DTL, please read carefully the objective of AS 22 or IndAS 12. It is self explanatory and will give you whole idea of this standard.

Bhavesh Jain

63 Points Joined February 2018

DTA and DTL are created in case there is any timing difference
[for example dep as per CO. ACT is more and dep as per IT ACT is less that means in future dep as per CO ACT will be less and dep as per IT ACT will be more.]
Therefore you are more tax now (as dep is less as per IT ACT) and in future you will pay less tax (as dep will be more)
the difference between wt ur paying now and wt u will be paying in future is the DTA (as benefit is still receivable from the extra tax paid now)