09 July 2008
Dear Ritesh, for A/Y 2009-10, for the purpose of computation of book profits as per Expl. 1 to Sec. 115JB, we shall first increase the profit/loss as per P&L a/c by the amount of Deferred tax or provision for Deferred tax debited to P&L a/c & subsequently deduct the amount of Deferred tax credited to P&L a/c. The intent of the law is to tax the balance amount of deferred tax not credited to p&L a/c. The provision for FBT is, however, allowable while computing Book Profit for the purpose of MAT vide Q.No. 103 of Circular No. 8/2005 dated 29-8-2005. So, it will neither be added nor subsequently deducted from the profit/loss as per P&L a/c.
CAclubindia
