query
for example.. in perviousyear,
book profit 100000
depreciation as per books NIL
income tax depreciation 15000
DTL or DTA?
and
same situation in next year
book profit 150000
depreciation as per books NIL
depreciation as per Income tax 10000
DTL or DTA
and TOTal?
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DTL or DTA
Replies (2)
only income tax related to income as per books is shown as expense in books of account and the rest amount is shown as DTA or DTL.
It should also be noted that DTA and DTL are to be considered only when it is a temporary difference.
It should also be noted that DTA and DTL are to be considered only when it is a temporary difference.
1. DTA or DTL will be accounted only when there is a timing difference.
2. In the first year, DTL needed to be created for Rs. 15,000 by applying the tax rate on it.
3. Second-year also DTL need to be created for Rs. 10,000 by applying the tax rate on it.
4. In both the cases, DTL needs to be created. If the above depreciation is not on account of timing differences or temporary differences then no need to create DTL.
Please correct me if the above solution has an alternative view.
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