deffered tax liability

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V.Ch.Venkateswara Rao

V.Ch.Venkateswara Rao (Querist)
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28 July 2009 How to calculate deffered tax liability ?
How many methods ?

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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28 July 2009 Please refer AS-22 for full detail.
Deferred Taxes are ‘Income Tax’ which arise in one period but because of Timing Difference will have to be actually paid in later years.

Timing Differnce arises due to :
Difference in net block of fixed assets between tax and accounts -
Difference in Depreciation due to
Different rates / methods
Pro rata treatment Vs. 180 days (in I year)
Exchange fluctuation of FC liability incurred for FA purchase. - As-11(R) Vs. Sch.VI Vs. S. 43A
Up to Rs. 5000 assets write off under Companies Act
Impairment Loss as per AS-28
Sale Proceeds Cr. to Block of Asset as per IT Act Vs. Profit / Loss on sale of FA’s recognised in P&L A/c
Purchase of Scientific Research Assets [35(2)]

Permanent Difference arrises due to :
Amortization of goodwill considered as disallowable expense
Personal expenditure disallowed by tax authorities
Penalty (Not being compensatory)
Payments disallowed U/s 40(A)(3)
Donations disallowed U/s 80G
Remuneration to partners disallowed U/s 40(b)
Scientific research expenditure.(only weighted element)
Exemptions u/s 10/10A/10B
Deductions U/s 80IA / IB / IC
Financial Lease - Circular No. 2 (dtd. 9th Feb 2001 – post AS 19 tax position)
Additional Depreciation on Revaluation