Defeerd tax urgent

Deferred Tax is calculated on the difference between the depreciation charged to the P&L Acccont and the depreciation allowed as per Income Tax Act. Please refer AS 22 for a detailed guidance :)

 

DEFERED TAX CALCULATED ON DIFF B/W DEP CHARGED AS PER COMPANIES ACT & DEP AS PER INCOME TAX ACT......I THINK SALE OF ANY ASSET WILL NOT HAVE ANY IMPACT ON CALCULATION OF DEFERED TAX

agreed with mr shrikant

Dear ma'am, Deffered tax is computed on d basis of timing difference between two laws. Accordingly, the dep charged to company as per the co act n as per the income tax act is need to concern. Suppose dep charged to the co as per the co act is more then it would be treated as deffered tax asset. If it is less then vice verse. The entry for DTA

Continued.... If it is less then it would be Deffered tax liability. Entry for DTA DTA a/c Dr To profit n loss a/c Entry for DTL P n l A/c Dr To DTL

In your case dep would be charged for d sold asset as per co act. N there won't be any dep under the income tax act for d same. Therefore need not concern about wdv while arriving DTA/DTL computation. Once u get d Difference amount on dep u need to charge 30% plus cess plus surcharge(if applicable) to arraive DTA/ DTL.

Eg: Dep as per co act = 100L Dep as per income tax act = 80L 20L DTA would be 20*.309= 6.18L