Assume i have depreciation in account rs 500 and in tax 200
The entire dep in tax remain unabsorbe during the year
So what will the amount of dta
7 Replies
CA Raj Doshi
(Practising CA)
(8924 Points)
Replied 27 September 2016
(500-200) * Applicable Future tax rate
CA Raj Doshi
(Practising CA)
(8924 Points)
Replied 27 September 2016
This shall be the value of closing DTA
sagar
(mathura)
(214 Points)
Replied 27 September 2016
My question was very simple
Suppose i have depreciation as per account rs 500 and income tax allowed rs 200 depreciation in current year
But due to loss the same rs 200 depreciation remain unabsorbed.
So in that case can we create dta on rs 200 i.e unabsorbed Dep. And
On rs 300 i.e difference in Dep. Between account and tax depreciation
AM i ryt or not.
CA Raj Doshi
(Practising CA)
(8924 Points)
Replied 27 September 2016
Yes you can. provided there are no such circumstances that indicate that company will.not be able to make profits.
sagar
(mathura)
(214 Points)
Replied 27 September 2016
your means there should be virtual certainties for create dta.
but i think since we can carry forward unabsorbed for any number of year hence no question of vcce would arise in this case.
but i think since we can carry forward unabsorbed for any number of year hence no question of vcce would arise in this case.
CA Raj Doshi
(Practising CA)
(8924 Points)
Replied 27 September 2016
The condition is on the company being able to make profits in future so as to set off losses and unabsorbed depreciation. If that is certain then and then only create DTA. If eventually the company closes down its business due to no profits , then DTA is a useless asset as it will have no value at all. So why create such assets which have no value.
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