06 July 2009
If the company is a infrastructure undertaking eligible for Sec 80IA tax holiday and in the given year, it has posted a huge book loss and even higher tax loss, is there a need for making any deferred tax adjustments in the books of account,(in the nature of DEFERRED TAX ASSET OR LIABILITY) given the fact, there is no tax incidence both as per books of account and tax accounts? Please share your thoughts based on the accounting standard on taxes on income read with income tax provisions. Thanks in advance
06 July 2009
Since it has 80IA tax holiday till the time it is in the holiday period no deferred tax asset or liability to be made. In the last year of the tax holiday check whether any deferred tax asset or liability can be made or not. Make an asset on loss on prudent basis only.
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