Meaning & treatment

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deepak gairola (Querist)
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13 April 2012 good afternoon experts

plz tell me what is deferred tax asset & deferred tax liability.what is the treatment of defered tax assets & deferred tax liabilities.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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14 April 2012 Deferred tax is the tax effect of timing differences.
Treatment of all expenses / incomes is not same as per accounts and income tax.
Suppose, the company has not paid amounts falling u/s 43B before filing return, the same will be disallowed in income tax. Hence, u have paid excess tax on account of this when compared to books. So u will create a deferred tax asset for it. Reverse way is deferred tax liability.