DTL

i want to know that,

what is the treatment of "Profit/ Loss on sale of Assets" in calculating the Deferred Tax Assets and Liability.

Replies (2)

Profit / loss on sale of assets would result into a deferred tax / liability depending on the rate of depreciation which you have accorded in the past in financial accounts and as per taxation law.....

If the depreciation rateis same then there wont be any deferred tax asset or liability as the cost is same, sale price is same while the usage and depreciation on the asset is same.

Regards,

There is a Simple Way to Create the DTL and DTA on the Fixed assest.

WDV of the FA as per Books of Account -----

WDV of the FA as per IT Act                     -----

Difference                                                 -----

If WDV in the Books is higher than the IT act it resulted into DTL and if the WDV in the IT is Higher than its resulted in to DTA.

 

 

 

 

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