11 July 2009
The company carries on the business of financial services.It has brought forward losses.But is making profit from past 2 years and paying tax under Provisions of 115JB.The company did not have any fixed asset, acquired fixed asset in middle of last financial year.But no provision for DTA or DTL was made last year. My query is: 1) how should the deferred tax be treated this year?
2)What is the effect of brought forward losses on DTA or DTL?
3)Should the DTA or DTL added or reduced from brought forward losses?
4)The company has a brought forward loss of 10Lacs still ,based on the concept of prudence since the company is making profit from 3 years we can expect it to make profit in the next year also.As the company is paying taxes under MAT provisions on Book profit,can the company set off the MAT credit against the regular tax payable if the company makes huge profits next year?How can this be done?
5)Does MAT provisions have any bearing on Deferred tax? If yes how should the deferred tax be treated?
6)If the Company is not carrying financial services will the answers for above questions be different? What will be the answers? [..Sir i understand there are too many questions but i really need answers for all of them as i have to complete the finalization.I hope i can get answers for these questions.]
11 July 2009
Sir i have gone through the answers for a few queries on deferred tax .but did not find answers for all my queries..that is why i had to post..please reply at the earliest.
CAclubindia
