Regarding deferred tax asset

CA Student

B/sheet is prepared for/upto 31th march. For this, client has to compute current tax and deferred tax. As we know provision for tax (i.e. Current tax) & Def tax is computed from "statement of computation of Income"

Confusion1:  Suppose client is preparing or computing DTA amount for showing it in balance sheet for say FY 12-13. How could be a client predict that Bonus will be paid within Return filling date [i.e.within september] standing on march.As per sec 43B of I.T Act if it is paid within Return filling date, thn it will be allowed in same year. I think Same year means Same previous year i.e. FY12-13. Now supoose if the client pays the bonus amt in aug or within 30th sep, then it must be allowed for that year, but we have already prepared & finalised our accts by april /may or june for Fy-12-13 and calculated DTA disallowing bonus assuming not paid.

Question on this confusion:

q1.Whether we compute DTA amount till 31st march. In that case how do we settle bonus if paid after march accts.

q2. If DTA is computed from Statement of Computation of Income..whether same computation (which we had prepared for our accounts for calculting DTA) will be filled in ITR or it is to be changed or modified later on aftter march.

q3. For Calculating DTA in accounts, whether only PGBP income is considered or all sources of income (i.e. HP, cap gain,etc) is considered

q4. As an auditor wht to check in DTA calculation/schedule...whether audting with regard DTA is checking calculation & appying para 15,17 only, or there is something else to check in this schedule..

q5. Is there anyone who is having a list of situations where DTA can be created.otherthan sec 43 B and depreciation difference..pls give full list of temp/timming differences..having any word file or excel sheet..then pls share

q6.not able to connect theory of AS 22 with practical scenario which used to happen in offices whil prerang accounts

q7. Any other suggestion...?

thank you for clearing my confusion..



1. Confusion regarding uncertainty about bonus payment schedule

See, there is no hard and fast rule that income tax provision made should be same as computation filed in the course of return filing procedure. Further, there is system cross verification which is generally done at the tme of filing of return:

Sum of "Provision for Income Tax" and " Deferred Tax"  always equals to the income tax computed for IT Return filing purpose. 

Impact in PL will remain same irrespective of your assumption about the payment date of bonus.

So, even if, at the time of preparing balance sheet u presume that bonus will not be paid  before 30th september, and DTA assets (say Rs. 8) is created accordingly and say your, 

provision for income tax = 40

deferred tax asset credited = (-)10 

Tax Expense = 30 charged to P/L account

Even if company pays the bonus, the status will be as on 30th september

Provision for Income Tax = 32

Deferred Tax Asset - (-)2

Tax Expense = 30 

But it does not mean, the amount stated in audited balance sheet is wrong. It is absolutely correct and effect of this payment will be adjusted in the next accounting year.

i.e. Amount of Tax Expense remained same , only the composition is changed.


 Generallly, the auditor can asceratin/ predict adter lukin the past trends of the payment, whether it will be paid before the due date of filing the return or not. Similarly, auditor can ask the management also regarding their intention for payment of bonus and in this regard management rpresentation can also be taken.


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1. Though u are supposed to compute DTA as on 31st of the financial year, but you have to consider many documents and payments made after 31st March for determing allowance and dis-allowance of many expenses. 

Suppose, the company finalises its balance sheet by the end of june and asks the auditor to issue its report. and bonus is not paid by that and even after looking the past trends, the auditor forms an opinion that the company is likely to pay the bonus after 30th september, then DTA should be created as under income tax, bonus will be dis-allowed. 

2. Computation prepared at the time of accounts preparation may differs from the final computation filed with income tax department. 

3.I dont know what do u  mean by "all income".? Give me few instances about HP income and capital gain income which u think may be relevant for calculating DTA?

Anywaz, all income needs to be taken into account. But, i think we, generally, come across with only PGBP items while calculating DTA.

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CA Student

thank you for clearing my doubts..



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