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11 October 2011 what is meant by deffered tax?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 October 2011 Deferred tax is an accounting concept meaning a future tax liability or asset, resulting from timing differences between the accounting value of assets and liabilities and their value for tax purposes.

sudhirsingh

sudhirsingh (Expert)
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11 October 2011

DTA arises because of Different treatments in:

Companies and Income Tax Act.

E.g

Dep. rate P&M as per IT Act :15%
Companies Act :13.91%

P&M Cost 100000
Co. Act EXp. Allowed : 13910
Income Tax : 15000

It means we are claiming less in our book (Companies Act)in comparison of what we are getting ( Income Tax)

(15000-13910)*30%---Tax rate (30+education cess
+ surcharge)

The resultant amount will be DTA

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