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Deferred Tax

07 April 2020

Dear Friends,

Anyone can teach me about the Deferred Tax Calculations. We recently started the business and Net Loss for the FU 19-20 is about 4 Crores. But, DTL is 4 Lakh as per Auditor working based on Depreciation between Companies Act & Income Tax Act.

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5 Replies

suraj (Student CA Final ) (288 Points)
Replied 07 April 2020

Based on deprecation;
DTL is created when Depreciation as per IT act (Say 300 )is greater then that of Companies act( say 200).
Then DTL will difference between both ie. ( 100 * Rate of Tax applicable to the company).

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Mohanraj J (1178 Points)
Replied 07 April 2020

Thanknu so much for your kind assistance

SOHAN LAL (Manger Accounts & Finance) (363 Points)
Replied 12 May 2020

Click below link for complete information with practical calculation

https://youtu.be/RGpQldmfuHw

debora M (BUSINESS DEVELOPMENT MANAGER) (1697 Points)
Replied 13 May 2020

Apply the required tax rate on the taxable income to determine the payable income tax. For example, at an average tax rate of 30 percent, the income tax payable on the tax returns bearing a deferred tax liability would be 30/100 x $8,350 = $2,505, while the one for the returns bearing deferred tax asset would be 30/100 x $12,550 = $3,760.

Calculate Deferred Taxes

Multiply the average tax rate by the temporary difference to get the deferred tax liability or asset. For instance, at tax rate of 30 percent, a deferred tax liability or benefit for a $2,100 would generate a deferred tax of 30/100 x $2,100 = $630. The income tax expense for a $630 deferred tax liability on payable income tax of $2,505, would be $2,505 + $630 = $3,135. As for a $630 deferred tax asset on a taxable income of $3,760, it would be $3,760 - $630 = $3,130.

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