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?
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.
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