IND AS 12

Dear prateek

Firstly i would like to say that AS-12 does not deal with Deferred tax and it is As-22 which deals with deferred tax

and the amount of DTA or DTL is mainly depend on Timing differences.

Like in above example

Difference in wdv is 3 so 3*tax rate should be provided as DTL

yes i agree with shahrukh,

pls explain me the reason.shahrukh , ind as is convergance with ifrs. it is called that is why as 12. give me sound reason. i am saying that income will increase becoz of lesser depreciation given by tax authorities. so we will pay the xtra tax.

Dear Prateek,

It would be more appropriate if u explain ur query in detail.

However as per my understanding, answer to ur question -

1) Carring value in book of accounts is Rs 10 and in Tax Laws Rs 7 it means that you are providing higher Deprciation under tax law

2) it means ur book dep is less and i T Dep is higher.

3) Means ur Accounting Income is higher then Taxable Income, hence u will pay less tax

4) Thus DTL to be created in the accounts with the timing difference i.e. 3 multiply with the substantial enacted tax rate (future tax rate)

Regards

Arun Chhajer 

Prateek..

Carrying amt is 10 and tax base is 7...

It can also be interpreted dat our future dep will be 10 as per accounting and 7 as per tax laws because ultimately it will be depreciated in future, irrespective of no. of years..

If Tax law will provide 7 as future dep,this means dey will provide less amt as compared to our 10...which means accounting will provide xtra 3 as dep..hence DTL should be created on it..

                                                     OR

It can be interpreted like...In earlier years,tax law has given xtra dep so its tax base is 7 and ours is 10..therefore, extra dep would be adjusted in future years hence leading to d creation of DTL..