Deferred Tax impact of unrealised Gain

This query is : Resolved

Ashish Goyal (Querist)
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13 May 2009 An Indian co. purchased some assets in foreign currency eqv to Rs 50 million on credit.At the year end the creditor is still outstanding in the books but the co. made an unrealised gain of say Rs 5 million on that.

What will be its treatment in accounts and Tax computation ?

Will there be any deferred tax impact of such unrealised gain ??

taxindiaconnect

taxindiaconnect (Expert)
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13 May 2009 Unrealised gains, since belong to a loan taken for purchase of capital assets, the same will be charged to P & L Account as per As 11 ( Before amendment) and as per tax the same would not be allowed. This expenditure is a temporary difference for deferred tax purpose, hence needs to be accounted for calculation of deferred tax.