Deferred Tax

deferred tax asset Rs. 2906 i.e.30.9% of Rs. 9407

Thanks Navin

Dear lakshmi,

   As rightly said by Mr.navin above, Taxable income would have been increased to the extent of rs,.9406. Hence there wud be a DTA of Rs.2906

Agreed with both of the expert..great job guys

hiii 

here as per company law you are claiming higher depreciation that means if you look at profit of company books it is lower than income tax books profit bcoz under income tax you are claiming lower depreciation as compared to company books.

means as per company law you have to pay less tax as compared to income tax Act

but truly tax is paid as per income Tax books so therefore you will pay greater than what  you are supposed to be paid as per  company books.

So as per AS 22 what you are paying excess today in compare to company law, is a DTA in company books.bcoz as per company book you were supposed to pay less tax but u paid higher so u would be able to set off this excess tax in next year in company book,remember income tax Act does not recognize any DTA & DTL it only created under company books to match the amount of actual tax under income tax with the amount of tax under company law.

and further after creating DTA and adding this to provision for tax you will get the same amount equal to Tax on company income.

Thanks Mr.Linesh.

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ABHAY

Dear All,

As per the above calculation, it is understood the DTA. However someone has sent me calculation of Deferred tax which seems to be opposite of what is explained above.

Can anybody explain me. Thanks in Advance.