Difficulty in as 22

If any undertaking is availing tax exemption for first five years since started.

So what will be the applicability & effect of AS 22 Deffered Tax in such case.

Please can anyone explain me in detail......

Replies (3)

Timing difference is to be calculated on normal tax rates even if entity is enjoying tax benefits

Please explain me the accounting for it in 6th year

Timing Difference which arise in TAX holidays period and are expeceted to reverse within that period are not recognised. because entity dont have to pay tax anyway.

And timing diff which arise in holiday period and are expected to reverse after tax holiday will be considered for DTA/DTL. That is only that part which is expected to reverse after tax holiday period is considered for creation of DTA/DTL.

Entry will be normal as you do in other cases

 

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