24 September 2008
You auditors will be in a position to help you. Anyway for easy understanding, 1) Take the Net Fixed assets value as per Books of Account 2) Take the Net Block of Assets as per Income Tax.
3) Arrive at the difference (1)-(2) = (3). Usually it will be a +ve figure i.e Net book value will be more.
Step 4 On the 3 above apply the current tax rate for e.g for the year ended 31 March 2008, apply 33.99%. This is the deferred Tax as of 31-3-2008.
If there is opening balance pass entry for the difference (opg-clg). This Difference you charge in current year P&L and the actual deferred tax liability arrived as per step 4 show in Balance sheet.
Please note that this is only a short-cut, as AS22 which deals with Deferred tax is very exhaustive and cant be compiled as a one shot solution.
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