what is the reason to introduce Deffered tax? can any one tell
Because there is a difference between the income of the comany & taxable income of the company ............just have a look at the dep rates of com. act & income tax act because of it there is a income diff occurs which generates a tax difference .........that difference calculated as deffered tax assestsor liabilities
CA SOURAV KUMAR GANDHI
(B.com (H), CA )
(133 Points)
Replied 12 August 2011
@ Nisha, you are totaly wrong, Deferred Tax is there not for harmonising the tax rate differences of co. Act, and IT Act. It is there for just recognising the Tax on timing difference i.e. which you can avail in future considering that we recognise DTA / DTL
Ex: Accounting Income (PBT) = 150000
Taxable Income = 180000
Timing Difference = 30000, you need to prepare DTA i.e. 30000 * 30% (assumed) = 9000
Entry: DTA A/c Dr. 9000
To P/l A/c 9000
P/l A/c Dr. 54000
To Provision for Current Tax A/c Dr. 54000
TAX EXPENSE: Current Tax 54000
DTA (9000)
TAX Exp 45000
Note: Theres nothing to do with Co. Act Tax rate, we have to take the tax rate as per IT Act on the balance sheet date.
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
