12 April 2008
One thing is to be remember that DTA & DTL is created for the temprorarily difference eg normally dep rate in the income tax act is more than the companies act then it means today we r taking more benefit in the income tax act which is subject to reversal then the concepet of deferred tax will come into picture just to compy with the matching concept. DTL- if benefit in income tax has taken mor ethan the book of account then DTL is recognized DTA- in the reverse case bt subject to having certantity of recovery the DTA MAT is minimum alternatre tax and required to be paid by a company if tax payable as per normal provision is less than the tax computed @ 11.33% of book profit. this is not an actual tax liability and even the excess tax than normal tax is allowed to be carried forward in future years. hope this would be sufficent since it is a very large concept which need the lengthy bexplanation which is not possible to explain in the msg
12 April 2008
One thing is to be remember that DTA & DTL is created for the temprorarily difference eg normally dep rate in the income tax act is more than the companies act then it means today we r taking more benefit in the income tax act which is subject to reversal then the concepet of deferred tax will come into picture just to compy with the matching concept. DTL- if benefit in income tax has taken mor ethan the book of account then DTL is recognized DTA- in the reverse case bt subject to having certantity of recovery the DTA MAT is minimum alternatre tax and required to be paid by a company if tax payable as per normal provision is less than the tax computed @ 11.33% of book profit. this is not an actual tax liability and even the excess tax than normal tax is allowed to be carried forward in future years. hope this would be sufficent since it is a very large concept which need the lengthy bexplanation which is not possible to explain in the msg
CAclubindia
