Sir,
How to find out deferred tax liability or asset. I know that difference between w.d.v. netblock and company act net block is deferred tax liability. But how to find out deferred tax asset or liability
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Deferred tax liability
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IT IS DIFFERENCE BETWEEN DEPRECIATION ACCORDING TO COMPANIES ACT AND INCOME TAX ACT ( RATES DIFFERENCES)
IT IS DIFFERENCE BETWEEN DEPRECIATION ACCORDING TO COMPANIES ACT AND INCOME TAX ACT ( RATES DIFFERENCES)
IT IS THE DIFFERENCE OF DEPRICIATION AS PER COMPANIES ACT AND AS PER INCOME TAX ACT. AND OTHER EXPENSES WHICH IS DISALLOWED BY THE INCOME TAX AUTHORITIES.
If WDV as per Companies Act is less than that as calculated under income tax act, then it means that you have claimed more depreciation under Companies Act than to be provided under Income Tax act. This inturn means that, due to this, your profits has been less than that show as calculated when IT Dep rates are taken into account. So then arises the Deferred Tax Liablity. and vice versa when WDV under IT Act is more than that of as calculated under Companies Act..
its not only the difference between Dep rates but it also includes setoff, disallowances...etc
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