Book profits
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 September 2012
I have created the Deferred Tax Asset for the F.Y 2011-12.
the Entry is :
Deferred tax Asset A/c Dr Rs. 20,000
To P & L A/c 20,000
The Company has incurred loss in that year say Rs. 1,20,000.
Now , my question is that while calculating the book profits , Do we need to deduct this or not ?
Means Total Book Loss is Rs. 140000 or Rs. 120000
the Entry is :
Deferred tax Asset A/c Dr Rs. 20,000
To P & L A/c 20,000
The Company has incurred loss in that year say Rs. 1,20,000.
Now , my question is that while calculating the book profits , Do we need to deduct this or not ?
Means Total Book Loss is Rs. 140000 or Rs. 120000
24 September 2012
Dear Friend as according to AS on Taxes it clearly said that if there is probability of set off of DTA then it will be carried forward to the nest year. Now if there is probability to incur profit in next year then it will be carried forward. Thanks
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24 September 2012
Book Profit does not include deferred tax expense/income. Since, it is part of 'provision of income tax"which is debited to profit & loss a/c and required to be deducted while arriving at book profit as per section 115JB-Explanation1(a).
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Querist : Anonymous
Querist :
Anonymous
(Querist)
25 September 2012
Ok sir , it means thats Total Book Loss shall be Rs. 140000 ?
25 September 2012
Yes.. Book loss will be Rs. 140000.
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