15 July 2012
Read AS -22 Taxes on Income for More detail.
Summary is as under:
The Income as per Book may not be same as per Income calculated for Income tax.
The difference between these two arise two to two differences: 1. permanent difference- Ex. Person Expediture disallowance. 2. Timing difference - exp allowed or disallowed while calculating current tax. but later it will be disallowed or allowed while calculating income tax for future.
For Example : Bonus Payable. if not paid till the date of return will be disallowed in while calculating current tax and later after payment it will be allowed.
The exp that will allowed later will create DTA. The exp that allowed today but disallowed later will create DTL.
Suppose Bonus Payable 100000. furture tax Rate 30% . Paid within due date 70000. Disallowed amount 30000
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