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Urgent regarding deferred tax asset

Sourav (Achieving d UnAchieved) (991 Points)

20 August 2013

Dear Professionals please help me through this practical problem.

We have received an audited balance sheet for the year ended 31.03.2012 under the companies act but depreciation has been charged as per IT act and no deferred tax asset has been recognised.

Now for the year ended 31.03.2013 we want to charge depreciation as per companies act and create deferred tax asset. What values should be considered as the opening balance for the current year.

Should the closing balance as per IT act on 31.03.2012 be considered as the opening balance this year.

Please help........

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mittal CA (Student CA Final ) (59 Points)
Replied 21 August 2013

i guess you have to recalculate the depreciation for the year ending 31-03-2012 as per rates applicable in companies act. Den only depreciation charged as per income tax act 1961 will be compared with that of companies act. There will be deferred tax liability or asset....

if you assume the opening balance to be as per IT Act, den you will calculate wrong deferred tax becoz the c/f of deferred tax for 2011-12 will not come into treatment...