Help Required in Deferred tax computation

Dear Shri,

The income tax depreciation is more than depreciation in the books of accounts.This means you are claiming more expenditure and deferring the payment of tax.This gives rise to defrred tax liability.

Deferred tax liability to be shown in the balance sheet= 33.99% (1346238-1263746)=28,039

You already have a deferred tax asset of Rupees 55,635.You will debit Profit & Loss Account by Rs. 83,675.

(i m assuming that depreciation is the only timing difference and there are no timing differences brought forward from the previous year)

Regards,

Fatema

DEAR DTA/DTL ALWAYS CREATE ON DIFFERENCE OF WDV OF FIXED ASSETS UNDER COMPANIES ACT AND WDV OF FIXED ASSETS UNDER INCOME TAX ACT. IT IS WRONG TO CALCULATE ON DEPRECIATION.

KINLY GIVE WDV UNDER INCOME TAX ACT AND COMPANIES ACT

IN ADDITION, DTA REPRESENTATION IS WRONG UNDER SCHEDULE VI

IT SHOULD BE BELOW INVESTMENTS. iN YOUR CASE IT WILL BE BELOW FIXED ASSETS

AND WHY FIVE YEAR INFORMATION GIVEN ? IT IS FOR ? (JUST FOR MY KNOWLEDGE)

Ameet,

DTA will be the same in both cases.calculate it on wdv or depreciation

NOT AT ALL DEAR. NOT ALWAYS.....IT MAY IMPACT GOOD DIFFERENCE IN BOTH THE METHOD. I HAD GREAT EXPERIENCE HENCE I AM TELLING......ALSO CONCEPTUALY AND AS PER ACCOUNTING STANDARD IT IS WRONG WAY OF CALCULATION.....

IF U WANT TO TRY THEN TRY, TAKE DIFFERENT CASES BY WAY OF CALCULATING BOTH THE METHOD,

IF U CALCULATE ON DEPRECIATION, THEN IT WILL BE FOR THE YEAR AND IF U CALCULATE ON WDV THEN IT WILL AS ON.

REST YOURS, IF U WANT TO CALCULATE THEN ITS UP TO U...

You can calculate deferred tax on difference in depreciation under the two laws and reconcile the same with WDV under the two laws and see whether the same tallies or not.

Refer the below mentioned link..

/forum/as-22-103468.asp

Refer excel sheet .......

Refer Deferred Tax Workings format in the following attachment