Ankit Agarwalla (CA) (281 Points)
17 August 2010Please solve this for me -
Opening Defferred Tax Assets = 212218/-
Closing WDV as per Books = 1675143/-
Closing WDV as per IT Act = 1924406/-
Depreciation as per Books = 495432/-
Depreciation as per IT Act = 393269/-
What is the amount of Defferred tax asset to be recognized in current year, if any?
CA Sachin D Jain
(FCA, CS, DISA (ICAI))
(1474 Points)
Replied 16 September 2010
Please solve this for me -
Opening Defferred Tax Assets = 212218/-
Closing WDV as per Books = 1675143/-
Closing WDV as per IT Act = 1924406/-
Depreciation as per Books = 495432/-
Depreciation as per IT Act = 393269/-
What is the amount of Defferred tax asset to be recognized in current year, if any?
Deferred tax asset / (liability) would be:
Method 1
opening balance -- 212218
On difference on Depreciation -- 31568
(495432-393269) @ 30.9%
Closing balance -- 243786
OR
Method 2
Difference of WDV -- 1924406 less 1675143
249263
Deferred tax asset on above @ 30.9% = 77022
There is a difference between Deferred tax asset on the basis of above two methods.
Suggested method is Method 2. Opening balance carried forward is not correct.
Provided no other timing difference is there.
CA NITUL MEHTA
(KPMG-Senior Consultant-International Tax )
(236 Points)
Replied 02 June 2011
The calculation sachin has done is not correct in methoed 2 249263 itself is the closing DTA and diffrence bretween it and opening is this years DTA OR DTL and the diffrence in that too is because of arthemitical inaccuracy
CA Sachin D Jain
(FCA, CS, DISA (ICAI))
(1474 Points)
Replied 02 June 2011
Dear Nimit,
Pl check what r u telling. Second method described by me is based on Balance Sheet Approach of calculating Deferred tax asset or (Liability). In practice, the difference between the two i.e. WDV of assets as per books and WDV of assets as per Income tax is considered as the timing difference because of which the taxable income and accounting income differ. Hence, Difference of both is considered for calculating Deffered tax asset / (liability).
Hope you will be able to understand or clarify me, if I am not correct.
CA NITUL MEHTA
(KPMG-Senior Consultant-International Tax )
(236 Points)
Replied 03 June 2011
yes what you are saying is exactly correct , but balance sheet approach the diffrence you calculated of rs 77022/- is closing DTA is what is was saying and the diffrence of (212218-77022) (openig DTA -closing DTA) will be treated as income in income statement. rest all is correct in your anser, i was a bit confused and yes my above anser is not correct i accept it sorry.
DHRUMIL
(ca final)
(33 Points)
Replied 22 June 2011
but sir if there is capital gain (long term) and certain deduction u/s40(related with non-deduction of tds) and also dividend income then will it affect the computation of deferred tax.
Suppose
in the A.Y.10-11
Profit as per books .:500000
Depreciation as per companies act.:100000
Depreciation as per income tax .:110000
LTCG.:10000
Dividend income.:5000
Expense disallowed u/s 40.:20000
then how the deferred tax wil be calculated???
and suppose in the next year there is loss i.e A.Y.11-12
Loss as per books of accounts.:100000
Depreciaiton as per companies act.:10000
Depreciation as per income tax act:15000
then what will be effect in deferred tax calculation??
CA Sachin D Jain
(FCA, CS, DISA (ICAI))
(1474 Points)
Replied 24 June 2011
To resolve your query, deferred tax asset / (liability) for AY 10-11 has been calculated below:
1) Opening balance of deferred tax asset / (liability) Rs. NIL
2) On Difference in Depreciation ( @ 30.90% of Rs. 100000-110000) Rs. (3090)
3) Long Term Capital Gain (Permanent Difference) Rs. NIL
4) On Disallowance u/s 40 for non-deduction of TDS (Permanent Diff) Rs. NIL
5) On Dividend Income (Permanent Difference) Rs. NIL
6) Closing Balance (1+2+3+4+5) Rs. (3090)
Deferred Tax Asset / (Liability) for AY 11-12
1) Opeing Balance Rs. (3090)
2) On Difference in Depreciation ( @ 30.90% of Rs. 10000-15000) Rs. (1545)
3) Closing Balance (1+2) Rs. (4635)
Notes:
a) Long Term Capital Gain is a term used in Income Tax Act. Such a term will not be found in the Companies Act. Hence, this term has been understood accordingly. Further, LTCG, being an item as per Income Tax Act, is of a permanent nature, hence, no deferred tax asset / (liability) will arise on the same.
b) Disallowance u/s 40 due to non-deduction of TDS is considered to be of a permanent nature, on the basis of assumption that the amount of TDS will not be deducted in future years and consequently, will not be paid to the Government. If it is assumed that the amount of TDS will be deducted and paid in future years, then the amount of expenses disallowed u/s 40 will be considered as a temporary difference and Deferred Tax asset will arise on the same.
c) Dividend received on shares of a Company is exempt from Income Tax and hence, is in the nature of permanent difference.
Aparna Raja K.C
(Student)
(520 Points)
Replied 24 June 2011
| Originally posted by : sachin d jain | ||
 |
To resolve your query, deferred tax asset / (liability) for AY 10-11 has been calculated below: 1) Opening balance of deferred tax asset / (liability) Rs. NIL 2) On Difference in Depreciation ( @ 30.90% of Rs. 100000-110000) Rs. (3090) 3) Long Term Capital Gain (Permanent Difference) Rs. NIL 4) On Disallowance u/s 40 for non-deduction of TDS (Permanent Diff) Rs. NIL 5) On Dividend Income (Permanent Difference) Rs. NIL 6) Closing Balance (1+2+3+4+5) Rs. (3090) Deferred Tax Asset / (Liability) for AY 11-12 1) Opeing Balance Rs. (3090) 2) On Difference in Depreciation ( @ 30.90% of Rs. 10000-15000) Rs. (1545) 3) Closing Balance (1+2) Rs. (4635) Notes: a) Long Term Capital Gain is a term used in Income Tax Act. Such a term will not be found in the Companies Act. Hence, this term has been understood accordingly. Further, LTCG, being an item as per Income Tax Act, is of a permanent nature, hence, no deferred tax asset / (liability) will arise on the same. b) Disallowance u/s 40 due to non-deduction of TDS is considered to be of a permanent nature, on the basis of assumption that the amount of TDS will not be deducted in future years and consequently, will not be paid to the Government. If it is assumed that the amount of TDS will be deducted and paid in future years, then the amount of expenses disallowed u/s 40 will be considered as a temporary difference and Deferred Tax asset will arise on the same. c) Dividend received on shares of a Company is exempt from Income Tax and hence, is in the nature of permanent difference. |
 |
Good Work:)
sundeep_kumar
(CA)
(49 Points)
Replied 30 June 2012
NET VALUE OF FIXED INCLUED CAPITAL WORK IN PROGESS WHICH CHARGED DEPRECIATION @ 0% NEED TO DEDUCT FROM NET BLOCK OF FIXED ASSETS BECAUSE IT NOT CHARGED ANY DEPRECIATION AS PER COMPANY ACT 1956 & INCOME TAX ACT 1961, IN PREVIOUS YEARS WE CALULATED DEFERRED TAX @ 33.66% OF DIFFERENCE IN NET BLOCK BECUSE ON THAT TIME TAX RATE IN SOME CASE TAX 30% + SURCHARGE 10%+CESS @ 2% BUT NOW IN CURRENT SITUATION DEFFERED TAX @ 30.9% ON DIFFERENCE AMOUNT BECUSE TAX RATE IS 30% +CESS 3%
kaustab.saha99@gmail.com
(Student CA Final )
(21 Points)
Replied 25 March 2014
dep as per co act 358531
dep as per it act 585096
dtl is 68649 ,is it correct or not?
Karan arora
(Article assistant)
(53 Points)
Replied 26 April 2014
Karan arora
(Article assistant)
(53 Points)
Replied 26 April 2014
Karan arora
(Article assistant)
(53 Points)
Replied 26 April 2014
pavan kumar
(Business)
(1 Points)
Replied 09 August 2016
Can any one calculate deferred tax for this....
Opening Deferred tax asset-----------------63,270/-
Dep as per companies act ------------------3,27,496/-
Dep as per Income Tax act------------------1,24,520/-
W.D.V. of fixed assets as per Books-------15,88,457/-
W.D.V. of fixed assets as per IT Act-------7,15,352/-
Pls Give reasonning also.............
CAclubindia
