Deferred Tax

This query is : Resolved

CA Pooja Tahilramani (Querist)
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19 August 2010 While calculating the deferred tax liability as at 31/3/2010, in case of a company having turnover exceeding one crore, whether surcharge should be levied at 10% (P.Y. 09-10) or 7.5% (P.Y. 10-11) as the reversal of the same would be in 2010-11?

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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19 August 2010 DTL is creating as on 31st March 2010. Hence Surcharge will be applicable as per rate PY 09-10 i.e 10%

Aditya Maheshwari

Aditya Maheshwari (Expert)
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19 August 2010 Surcharge leviable on income above Rs. 1 crore.

Next year rate of tax to be considered for creating deferred tax and hence surchage will be 7.5% while calculating deferred tax and not 10% as mentioned above.

CA Amit Joshi

CA Amit Joshi (Expert)
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19 August 2010 Agree with Aditya. Surcharge will be 7.5% as per AS-22.

CA Pooja Tahilramani

CA Pooja Tahilramani (Querist)
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19 August 2010 Thank you.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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20 August 2010 thanks for correction Aditya Ji.

Deferred tax assets and liabilities should be measured using the tax rates and tax laws that have been enacted or substantively enacted
by the balance sheet date.

Deferred tax assets and liabilities are usually measured using the taxrates and tax laws that have been enacted. However, certain announcements of tax rates and tax laws by the government may have the substantive effect of actual enactment. In these circumstances, deferred tax assets and liabilities are measured using such announced tax rate and tax laws.

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