Suppose Xyz pvt. Ltd. Company has difference in depreciation as per income tax or as per company act if company not deposit deferred tax so what penalty can impose on company for default?
Pankaj Arora (Learner) (3134 Points)
14 May 2011Suppose Xyz pvt. Ltd. Company has difference in depreciation as per income tax or as per company act if company not deposit deferred tax so what penalty can impose on company for default?
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 14 May 2011
Deferred tax is not under the provisions of income tax. Deferred tax is just a provision to be made in books as per Accounting Standard 22 - Accounting for Deferred Tax. You never calculate tax on the profit as shown in profit and loss account. Tax is computed by making adjustments to the profit in the books to arrive at taxable profit. Tax is calculated at such amounts. There are no consequences for non-compliance with deferred tax under Income Tax Act. The consequences are that the picture as shown will not be true and fair keeping Accounting Standards in view. In this case, if there is no provision for deferred tax, then the auditor may disqualify the report.
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
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