Defer tax liability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2012 Dear Sir,

I am saurabh Mishra a CS student (Inter)please tell me how to calculate the defer tax liability of a company. suppose a company earned 25 lakh profit of before taxation.

Please advise me for the above stated,

Thanks & Regard,
Saurabh Mishra
Cont.9737774448

Guest

Guest (Expert)

29 December 2012 Hi Saurabh.. deferred taxation is very wide.
The first point that you need to keep in mind is that deferred tax asset/liability arises only when there is a difference between income as per books and income as per income tax.

For example ,
Accounting income is Rs.100000 (inc bonus payable of Rs. 10000).
Taxable income is Rs. 110000 (as bonus is allowable as an expense only when it is actually paid so it is added back).

From the above we can notice that we have claimed an expense but the income tax act has not given the claim of it.
It is implied that department will give the benefit of it next year.hence deferred tax asset will be created @ 30% on Rs.10000