Shri Shri (Professional) (629 Points)
15 November 2010KINDLY HELP ME OUT IN COMPUTING PROVISION FOR TAX & DEFERED TAX COMPUTATION WITH THE DETAILS BELOW
PROFIT OF THE COMPANY BEFORE TAX (PBT) : 40,88,605
DEPRECIATION AS PER COMPANIES ACT : 12,63,746
DEPRECIATION AS PER IT ACT : 13,46,238
PLS FIND THE IMAGE BELOW & HELP ME TO FILL THE BOX
P&L Image
B/s Image:
ITS URGENT KINDLY RENDER A SOLUTION
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 15 November 2010
Dear Shri,
The income tax depreciation is more than depreciation in the books of accounts.This means you are claiming more expenditure and deferring the payment of tax.This gives rise to defrred tax liability.
Deferred tax liability to be shown in the balance sheet= 33.99% (1346238-1263746)=28,039
You already have a deferred tax asset of Rupees 55,635.You will debit Profit & Loss Account by Rs. 83,675.
(i m assuming that depreciation is the only timing difference and there are no timing differences brought forward from the previous year)
Regards,
Fatema
Ameet
(L)
(1678 Points)
Replied 15 November 2010
Ameet
(L)
(1678 Points)
Replied 15 November 2010
IN ADDITION, DTA REPRESENTATION IS WRONG UNDER SCHEDULE VI
AND WHY FIVE YEAR INFORMATION GIVEN ? IT IS FOR ? (JUST FOR MY KNOWLEDGE)
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 15 November 2010
Ameet,
DTA will be the same in both cases.calculate it on wdv or depreciation
Ameet
(L)
(1678 Points)
Replied 15 November 2010
NOT AT ALL DEAR. NOT ALWAYS.....IT MAY IMPACT GOOD DIFFERENCE IN BOTH THE METHOD. I HAD GREAT EXPERIENCE HENCE I AM TELLING......ALSO CONCEPTUALY AND AS PER ACCOUNTING STANDARD IT IS WRONG WAY OF CALCULATION.....
IF U WANT TO TRY THEN TRY, TAKE DIFFERENT CASES BY WAY OF CALCULATING BOTH THE METHOD,
IF U CALCULATE ON DEPRECIATION, THEN IT WILL BE FOR THE YEAR AND IF U CALCULATE ON WDV THEN IT WILL AS ON.
REST YOURS, IF U WANT TO CALCULATE THEN ITS UP TO U...
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 15 November 2010
You can calculate deferred tax on difference in depreciation under the two laws and reconcile the same with WDV under the two laws and see whether the same tallies or not.
A.Deepa
(CA )
(195 Points)
Replied 18 November 2010
Refer Deferred Tax Workings format in the following attachment
CAclubindia
