deferred tax assets

This query is : Open

Abhijit Gupta (Querist)
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12 May 2011 what is the treatment of deferred tax assets already appearing in the balance sheet?also whether section 145a impacts the above and in what manner?

RAHUL SARIA (CA, CS)

RAHUL SARIA (CA, CS) (Expert)
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14 May 2011 Deferred Tax Asset(DTA) is created on Timing difference as per AS-22 issued by ICAI. The DTA shall be reversed as the timing lapses based on the item it has been created. It is just a book entry and has nothing to do with actual tax liability. It is made to given actual charge to P/L on account of Tax based on profit in the books.

Whereas S.145A talks about accounting of Purchase, Sales and Inventory, which should be inclusive of taxes (mainly indirect taxes) to be inclusive for the purpose of income tax computation.

Thus, S.145A has nothing to do with DTA

Abhijit Gupta

Abhijit Gupta (Querist)
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15 May 2011 Thank you sir.

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