17 June 2010
I require a guidance for calculation of Deferred Tax Asset / Liability. Following are the details. 1.Dep. As Per Accounts Rs. 45642/- 2.Dep. As Per Income Tax Rs.107160 3.Bonus Provision Rs. 149669 4.Excess provision for Tax Rs. 144519 5.Provision for leave encahment Rs. 25404 6.Provision for bad debts Rs. 5394 7. Profit as per books Rs. 1853841
17 June 2010
First you have to calculate the Taxable income as per Income tax Act. as below Book profit 1,853,841 Add: Dep as per a/c 45,642 Bonus prov (43B) 149,669 Excess tax prov 144,519 Prov Leave en (43B) 25,404 Bad debts prov 5,394 Less: Dep As per Tax 170,160 ----------- Taxable income 2,117,309
In this case you have to create deferred tax assets because your Taxable income is higher than Book Income and all item is timing difference. Income as per Account 1,853,841 Income as per Tax 2,117,309 ------------ 263,468
Deferred tax assets 30.9% 81,412
Tax Expenses (1853841*30.9%) 572836 Dr Def Tax Assts(as per above) 81412 Dr Provision for Income tax 654248 Cr (2117309*30.9%)
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