Caclulation of deffered tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 March 2016 Dear Experts,
Assume we have purchase the car Rs. 1 lacs and useful life is 10 year, then dep. As company act. Is 100000 less 5000 as 5% residual value, 95000/10, 9500 per year however as per income tax 15% dep. Is 15000 in this case query.1) weather deffered tax liability or deffered tax assets would be created..2) what would be accounting entry for the same..3) how it will reverse in subsequent year..

Regard
Manoj Gupta

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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25 March 2016 ABOVE EXAMPLE THERE WILL BE DEFFERED TAX LIABILITY
YOU CAN DEBIT P&L A/C dr
CREDIT DEFFERED TAX LIABILITY cr

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 March 2016 1. Deferred tax liability should be booked.

2. Deferred tax Dr 3090
To Deferred tax liability 3090
(Being DTL @ 30.90% on timing difference)

3. From 8th year on wards reversal begins because DTL will change to DTA.

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