Meaning of defferred tax

What is meant by defferred tax??
Replies (2)

Deffered tax liability (DTL) is the tax which as per accounting treament belongs to this year but per tax provisions it  is paid by you next year .that means you have a libility to pay it next year thats why you are recogning it as liabilty.

Deffered tax asset (DTA) is the tax which as per accounting treament belongs to next year but per tax provisions it  is paid by you this year. that means you dont have to may it next year which is a asset for you thats why you are recogning it as asset.

This nothing but a result of timing difference . say i am claiming an expense in accounts but for tax it is disallowed . resultant difference of tax is DTA

i am claiming low depreciation in accounts but for tax high depreciation is allowed to me . resultant difference in tax is DTL as there willm come time when depreciation in accounts will be more than amount of depreciation as per income tax act.. 

Defer simply means put off (an action or event) to a later time; postpone.  Hence Deferred tax simply means taking into account the effect of postponing of the incidence of tax to a later period.

 When we defer the tax,two things happen either we have saved tax in current year,but will have to pay it in later year/s. Hence it will be a liabilty in future. On the other hand, we have paid excess tax this year,and it will be setoff in subsequent year/s.

The difference in tax payable is due to different incomes according to IT Act and Accounting Standards/Companies Act.

​Hope I am clear.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
10 November 2026
Direct Tax Manager

CAAQ CONSULTANCY PVT LTD

New Delhi

CA Final

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details
Company
Featured 27 October 2026
semi-qualified CA

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Final

View Details
Company
ARTICLESHIP 07 November 2026
Article Assisstant

DPV & Associates

Chennai

CA Inter

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
ARTICLESHIP 25 October 2026
Article Intern (CA Articleship)

Arpan Bohra & Co

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 29 October 2026
Article Assistant (CA Inter / CMA Inter) - Thrissur

Varma Raja & Associates

Thrissur

CA Inter

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details