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Home Acts & Rules Companies Law Rules Companies (Indian Accounting Standards) Rules, 2015 Chapters List Chapter B B. Indian Accounting Standards (Ind AS) This
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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

Extract

..... ard requires an entity to account for the tax consequences of transactions and other events in the same way that it accounts for the transactions and other events themselves. Thus, for transactions and other events recognised in profit or loss, any related tax effects are also recognised in profit or loss. For transactions and other events recognised outside profit or loss (either in other comprehensive income or directly in equity), any related tax effects are also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively). Similarly, the recognition of deferred tax assets and liabilities in a business combination affects the amount of goodwill arising in that business combination or the amount of the bargain purchase gain recognised. This Standard also deals with the recognition of deferred tax assets arising from unused tax losses or unused tax credits, the presentation of income taxes in the financial statements and the disclosure of information relating to income taxes. Scope 1 This Standard shall be applied in accounting for income taxes. 2 For the purposes of this Standard, income taxes include all domestic and foreign taxes .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... ome) and deferred tax expense (deferred tax income). Tax base 7 The tax base of an asset is the amount that will be deductible for tax purposes against any taxable economic benefits that will flow to an entity when it recovers the carrying amount of the asset. If those economic benefits will not be taxable, the tax base of the asset is equal to its carrying amount. Examples 1 A machine cost ₹ 100. For tax purposes, depreciation of ₹ 30 has already been deducted in the current and prior periods and the remaining cost will be deductible in future periods, either as depreciation or through a deduction on disposal. Revenue generated by using the machine is taxable, any gain on disposal of the machine will be taxable and any loss on disposal will be deductible for tax purposes. The tax base of the machine is ₹ 70. 2 Interest receivable has a carrying amount of ₹ 100. The related interest revenue will be taxed on a cash basis. The tax base of the interest receivable is nil. 3 Trade receivables have a carrying amount of ₹ 100. The related revenue has already been included in taxable profit (tax loss). The tax base of the trade receivables is ₹ 100. 4 Di .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... e is no deferred tax asset. 9 Some items have a tax base but are not recognised as assets and liabilities in the balance sheet. For example, preliminary expenses are recognised as an expense in determining accounting profit in the period in which they are incurred but may not be permitted as a deduction in determining taxable profit (tax loss) until a later period(s). The difference between the tax base of the preliminary expenses, being the amount permitted as a deduction in future periods under taxation laws, and the carrying amount of nil is a deductible temporary difference that results in a deferred tax asset. 10 Where the tax base of an asset or liability is not immediately apparent, it is helpful to consider the fundamental principle upon which this Standard is based: that an entity shall, with certain limited exceptions, recognise a deferred tax liability (asset) whenever recovery or settlement of the carrying amount of an asset or liability would make future tax payments larger (smaller) than they would be if such recovery or settlement were to have no tax consequences. Example C following paragraph 51A illustrates circumstances when it may be helpful to consider this fund .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... e is a taxable temporary difference and the obligation to pay the resulting income taxes in future periods is a deferred tax liability. As the entity recovers the carrying amount of the asset, the taxable temporary difference will reverse and the entity will have taxable profit. This makes it probable that economic benefits will flow from the entity in the form of tax payments. Therefore, this Standard requires the recognition of all deferred tax liabilities, except in certain circumstances described in paragraphs 15 and 39. Example An asset which cost ₹ 150 has a carrying amount of ₹ 100. Cumulative depreciation for tax purposes is ₹ 90 and the tax rate is 25%. The tax base of the asset is ₹ 60 (cost of ₹ 150 less cumulative tax depreciation of ₹ 90). To recover the carrying amount of ₹ 100, the entity must earn taxable income of ₹ 100, but will only be able to deduct tax depreciation of ₹ 60. Consequently, the entity will pay income taxes of ₹ 10 (₹ 40 at 25%) when it recovers the carrying amount of the asset. The difference between the carrying amount of ₹ 100 and the tax base of ₹ 60 is a taxable temp .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... or tax purposes (see paragraph 20); (c) goodwill arises in a business combination (see paragraph 21); (d) the tax base of an asset or liability on initial recognition differs from its initial carrying amount, for example when an entity benefits from nontaxable government grants related to assets (see paragraphs 22 and 33); or (e) the carrying amount of investments in subsidiaries, branches and associates or interests in joint arrangements becomes different from the tax base of the investment or interest (see paragraphs 38-45). Business combinations 19 With limited exceptions, the identifiable assets acquired and liabilities assumed in a business combination are recognised at their fair values at the acquisition date. Temporary differences arise when the tax bases of the identifiable assets acquired and liabilities assumed are not affected by the business combination or are affected differently. For example, when the carrying amount of an asset is increased to fair value but the tax base of the asset remains at cost to the previous owner, a taxable temporary difference arises which results in a deferred tax liability. The resulting deferred tax liability affects goodwill (see paragr .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... axable profit. Moreover, in such jurisdictions, the cost of goodwill is often not deductible when a subsidiary disposes of its underlying business. In such jurisdictions, goodwill has a tax base of nil. Any difference between the carrying amount of goodwill and its tax base of nil is a taxable temporary difference. However, this Standard does not permit the recognition of the resulting deferred tax liability because goodwill is measured as a residual and the recognition of the deferred tax liability would increase the carrying amount of goodwill. 21A Subsequent reductions in a deferred tax liability that is unrecognised because it arises from the initial recognition of goodwill are also regarded as arising from the initial recognition of goodwill and are therefore not recognised under paragraph 15(a). For example, if in a business combination an entity recognises goodwill of ₹ 100 that has a tax base of nil, paragraph 15(a) prohibits the entity from recognising the resulting deferred tax liability. If the entity subsequently recognises an impairment loss of ₹ 20 for that goodwill, the amount of the taxable temporary difference relating to the goodwill is reduced from &# .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... n entity to recognise the resulting deferred tax liability or asset, either on initial recognition or subsequently (see example below). Furthermore, an entity does not recognise subsequent changes in the unrecognised deferred tax liability or asset as the asset is depreciated. Example illustrating paragraph 22(c) An entity intends to use an asset which cost ₹ 1,000 throughout its useful life of five years and then dispose of it for a residual value of nil. The tax rate is 40%. Depreciation of the asset is not deductible for tax purposes. On disposal, any capital gain would not be taxable and any capital loss would not be deductible. As it recovers the carrying amount of the asset, the entity will earn taxable income of ₹ 1,000 and pay tax of ₹ 400. The entity does not recognise the resulting deferred tax liability of ₹ 400 because it results from the initial recognition of the asset. In the following year, the carrying amount of the asset is ₹ 800. In earning taxable income of ₹ 800, the entity will pay tax of ₹ 320. The entity does not recognise the deferred tax liability of ₹ 320 because it results from the initial recognition of th .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... ining taxable profit. Similarly, if the carrying amount of an asset is less than its tax base, the difference gives rise to a deferred tax asset in respect of the income taxes that will be recoverable in future periods. Example An entity recognises a liability of ₹ 100 for gratuity and leave encashment expenses by creating a provision for gratuity and leave encashment. For tax purposes, any amount with regard to gratuity and leave encashment will not be deductible until the entity pays the same. The tax rate is 25%. The tax base of the liability is nil (carrying amount of ₹ 100, less the amount that will be deductible for tax purposes in respect of that liability in future periods). In settling the liability for its carrying amount, the entity will reduce its future taxable profit by an amount of ₹ 100 and, consequently, reduce its future tax payments by ₹ 25 (₹ 100 at 25%). The difference between the carrying amount of ₹ 100 and the tax base of nil is a deductible temporary difference of ₹ 100. Therefore, the entity recognises a deferred tax asset of ₹ 25 (₹ 100 at 25%), provided that it is probable that the entity will earn su .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... 00 payable on maturity in 5 years with an interest rate of 2% payable at the end of each year. The effective interest rate is 2%. The debt instrument is measured at fair value. At the end of Year 2, the fair value of the debt instrument has decreased to ₹ 918 as a result of an increase in market interest rates to 5%. It is probable that Entity A will collect all the contractual cash flows if it continues to hold the debt instrument. Any gains (losses) on the debt instrument are taxable (deductible) only when realised. The gains (losses) arising on the sale or maturity of the debt instrument are calculated for tax purposes as the difference between the amount collected and the original cost of the debt instrument. Accordingly, the tax base of the debt instrument is its original cost. The difference between the carrying amount of the debt instrument in Entity A’s balance sheet of ₹ 918 and its tax base of ₹ 1,000 gives rise to a deductible temporary difference of ₹ 82 at the end of Year 2 (see paragraphs 20 and 26(d)), irrespective of whether Entity A expects to recover the carrying amount of the debt instrument by sale or by use, i.e. by holding it and .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... nt taxable temporary differences relating to the same taxation authority and the same taxable entity, the deferred tax asset is recognised to the extent that: (a) it is probable that the entity will have sufficient taxable profit relating to the same taxation authority and the same taxable entity in the same period as the reversal of the deductible temporary difference (or in the periods into which a tax loss arising from the deferred tax asset can be carried back or forward). In evaluating whether it will have sufficient taxable profit in future periods, an entity: (i) compares the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the reversal of those deductible temporary differences. This comparison shows the extent to which the future taxable profit is sufficient for the entity to deduct the amounts resulting from the reversal of those deductible temporary differences. (ii) ignores taxable amounts arising from deductible temporary differences that are expected to originate in future periods, because the deferred tax asset arising from these deductible temporary differences will itself require future taxable profit in order t .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... e case when a deferred tax asset arises on initial recognition of an asset is when a non-taxable Government grant related to an asset is deducted in arriving at the carrying amount of the asset but, for tax purposes, is not deducted from the asset's depreciable amount (in other words its tax base); the carrying amount of the asset is less than its tax base and this gives rise to a deductible temporary difference. Government grants may also be set up as deferred income in which case the difference between the deferred income and its tax base of nil is a deductible temporary difference. Whichever method of presentation an entity adopts, the entity does not recognise the resulting deferred tax asset, for the reason given in paragraph 22.] Unused tax losses and unused tax credits 34 A deferred tax asset shall be recognised for the carryforward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. 35 The criteria for recognising deferred tax assets arising from the carryforward of unused tax losses and tax credits are the same as the criter .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... ph 24 or 34. Another example is when an entity reassesses deferred tax assets at the date of a business combination or subsequently (see paragraphs 67 and 68). Investments in subsidiaries, branches and associates and interests in joint arrangements 38 Temporary differences arise when the carrying amount of investments in subsidiaries, branches and associates or interests in joint arrangements (namely the parent or investor’s share of the net assets of the subsidiary, branch, associate or investee, including the carrying amount of goodwill) becomes different from the tax base (which is often cost) of the investment or interest. Such differences may arise in a number of different circumstances, for example: (a) the existence of undistributed profits of subsidiaries, branches, associates and joint arrangements; (b) changes in foreign exchange rates when a parent and its subsidiary are based in different countries; and (c) a reduction in the carrying amount of an investment in an associate to its recoverable amount. In consolidated financial statements, the temporary difference may be different from the temporary difference associated with that investment in the parent’s se .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... of its investment in an associate, but can determine that it will equal or exceed a minimum amount. In such cases, the deferred tax liability is measured at this amount. 43 The arrangement between the parties to a joint arrangement usually deals with the distribution of the profits and identifies whether decisions on such matters require the consent of all the parties or a group of the parties. When the joint venturer or joint operator can control the timing of the distribution of its share of the profits of the joint arrangement and it is probable that its share of the profits will not be distributed in the foreseeable future, a deferred tax liability is not recognised. 44 An entity shall recognise a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries, branches and associates, and interests in joint arrangements, to the extent that, and only to the extent that, it is probable that: (a) the temporary difference will reverse in the foreseeable future; and (b) taxable profit will be available against which the temporary difference can be utilised. 45 In deciding whether a deferred tax asset is recognised for deductible temporary diffe .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... of ₹ 60. A tax rate of 20% would apply if the item were sold and a tax rate of 30% would apply to other income. The entity recognises a deferred tax liability of ₹ 8 (₹ 40 at 20%) if it expects to sell the item without further use and a deferred tax liability of ₹ 12 (₹ 40 at 30%) if it expects to retain the item and recover its carrying amount through use. Example B An item of property, plant and equipment with a cost of ₹ 100 and a carrying amount of ₹ 80 is revalued to ₹ 150. No equivalent adjustment is made for tax purposes. Cumulative depreciation for tax purposes is ₹ 30 and the tax rate is 30%. If the item is sold for more than cost, the cumulative tax depreciation of ₹ 30 will be included in taxable income but sale proceeds in excess of cost will not be taxable. The tax base of the item is ₹ 70 and there is a taxable temporary difference of ₹ 80. If the entity expects to recover the carrying amount by using the item, it must generate taxable income of ₹ 150, but will only be able to deduct depreciation of ₹ 70. On this basis, there is a deferred tax liability of ₹ 24 (₹ 80 at 30 .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... specifies a tax rate applicable to the taxable amount derived from the sale of an asset that differs from the tax rate applicable to the taxable amount derived from using an asset, the former rate is applied in measuring the deferred tax liability or asset related to a non-depreciable asset. 51C - 51D (Refer Appendix 1) 51E Paragraph 51B does not change the requirements to apply the principles in paragraphs 24-33 (deductible temporary differences) and paragraphs 34-36 (unused tax losses and unused tax credits) of this Standard when recognising and measuring deferred tax assets. 52 [Moved and renumbered 51A] 52A In some jurisdictions, income taxes are payable at a higher or lower rate if part or all of the net profit or retained earnings is paid out as a dividend to shareholders of the entity. In some other jurisdictions, income taxes may be refundable or payable if part or all of the net profit or retained earnings is paid out as a dividend to shareholders of the entity. In these circumstances, current and deferred tax assets and liabilities are measured at the tax rate applicable to undistributed profits. 13[****] 14[Example illustrating paragraphs 52A and 57A] The following exam .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... oyee Benefits). 56 The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. An entity shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available. Recognition of current and deferred tax 57 Accounting for the current and deferred tax effects of a transaction or other event is consistent with the accounting for the transaction or event itself. Paragraphs 58 to 68C implement this principle. 15[57A An entity shall recognise the income tax consequences of dividends as defined in Ind AS 109 when it recognises a liability to pay a dividend. The income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... e, shall be recognised in other comprehensive income (see paragraph 62). (b) directly in equity, shall be recognised directly in equity (see paragraph 62A). 62 Indian Accounting Standards require or permit particular items to be recognised in other comprehensive income. Examples of such items are: (a) a change in carrying amount arising from the revaluation of property, plant and equipment (see Ind AS 16); and (b) [Refer Appendix 1] (c) exchange differences arising on the translation of the financial statements of a foreign operation (see Ind AS 21). (d) [Refer Appendix 1] 62A Indian Accounting Standards require or permit particular items to be credited or charged directly to equity. Examples of such items are: (a) an adjustment to the opening balance of retained earnings resulting from either a change in accounting policy that is applied retrospectively or the correction of an error (see Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors); and (b) amounts arising on initial recognition of the equity component of a compound financial instrument (see paragraph 23). 63 In exceptional circumstances it may be difficult to determine the amount of current and defer .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... Such an amount paid or payable to taxation authorities is charged to equity as a part of the dividends. Deferred tax arising from a business combination 66 As explained in paragraphs 19 and 26(c), temporary differences may arise in a business combination. In accordance with Ind AS 103, an entity recognises any resulting deferred tax assets (to the extent that they meet the recognition criteria in paragraph 24) or deferred tax liabilities as identifiable assets and liabilities at the acquisition date. Consequently, those deferred tax assets and deferred tax liabilities affect the amount of goodwill or the bargain purchase gain the entity recognises. However, in accordance with paragraph 15(a), an entity does not recognise deferred tax liabilities arising from the initial recognition of goodwill. 67 As a result of a business combination, the probability of realising a pre-acquisition deferred tax asset of the acquirer could change. An acquirer may consider it probable that it will recover its own deferred tax asset that was not recognised before the business combination. For example, the acquirer may be able to utilise the benefit of its unused tax losses against the future taxable .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... duction until the share options are exercised, with the measurement of the tax deduction based on the entity’s share price at the date of exercise. 68B As with the preliminary expenses discussed in paragraphs 9 and 26(b) of this Standard, the difference between the tax base of the employee services received to date (being the amount permitted as a deduction in future periods under taxation laws), and the carrying amount of nil, is a deductible temporary difference that results in a deferred tax asset. If the amount permitted as a deduction in future periods under taxation laws is not known at the end of the period, it shall be estimated, based on information available at the end of the period. For example, if the amount permitted as a deduction in future periods under taxation laws is dependent upon the entity’s share price at a future date, the measurement of the deductible temporary difference should be based on the entity’s share price at the end of the period. 68C As noted in paragraph 68A, the amount of the tax deduction (or estimated future tax deduction, measured in accordance with paragraph 68B) may differ from the related cumulative remuneration expense. .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... on authority on either: (i) the same taxable entity; or (ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 75 To avoid the need for detailed scheduling of the timing of the reversal of each temporary difference, this Standard requires an entity to set off a deferred tax asset against a deferred tax liability of the same taxable entity if, and only if, they relate to income taxes levied by the same taxation authority and the entity has a legally enforceable right to set off current tax assets against current tax liabilities. 76 In rare circumstances, an entity may have a legally enforceable right of set-off, and an intention to settle net, for some periods but not for others. In such rare circumstances, detailed scheduling may be required to establish reliably whether the deferred tax liability of one taxable entity will result in increased tax payments in the same period in which a deferred tax asset of another taxable entity .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... dix 1]; (c) an explanation of the relationship between tax expense (income) and accounting profit in either or both of the following forms: (i) a numerical reconciliation between tax expense (income) and the product of accounting profit multiplied by the applicable tax rate(s), disclosing also the basis on which the applicable tax rate(s) is (are) computed; or (ii) a numerical reconciliation between the average effective tax rate and the applicable tax rate, disclosing also the basis on which the applicable tax rate is computed; (d) an explanation of changes in the applicable tax rate(s) compared to the previous accounting period; (e) the amount (and expiry date, if any) of deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax asset is recognised in the balance sheet; (f) the aggregate amount of temporary differences associated with investments in subsidiaries, branches and associates and interests in joint arrangements, for which deferred tax liabilities have not been recognised (see paragraph 39); (g) in respect of each type of temporary difference, and in respect of each type of unused tax losses and unused tax credits: (i) the amo .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... rs that could affect that relationship in the future. The relationship between tax expense (income) and accounting profit may be affected by such factors as revenue that is exempt from taxation, expenses that are not deductible in determining taxable profit (tax loss), the effect of tax losses and the effect of foreign tax rates. 85 In explaining the relationship between tax expense (income) and accounting profit, an entity uses an applicable tax rate that provides the most meaningful information to the users of its financial statements. Often, the most meaningful rate is the domestic rate of tax in the country in which the entity is domiciled, aggregating the tax rate applied for national taxes with the rates applied for any local taxes which are computed on a substantially similar level of taxable profit (tax loss). However, for an entity operating in several jurisdictions, it may be more meaningful to aggregate separate reconciliations prepared using the domestic rate in each individual jurisdiction. The following example illustrates how the selection of the applicable tax rate affects the presentation of the numerical reconciliation. Example illustrating paragraph 85 In 19X2, a .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... there are additional potential income tax consequences not practicably determinable. In the parent’s separate financial statements, if any, the disclosure of the potential income tax consequences relates to the parent’s retained earnings. 87C An entity required to provide the disclosures in paragraph 82A may also be required to provide disclosures related to temporary differences associated with investments in subsidiaries, branches and associates or interests in joint arrangements. In such cases, an entity considers this in determining the information to be disclosed under paragraph 82A. For example, an entity may be required to disclose the aggregate amount of temporary differences associated with investments in subsidiaries for which no deferred tax liabilities have been recognised (see paragraph 81(f)). If it is impracticable to compute the amounts of unrecognised deferred tax liabilities (see paragraph 87) there may be amounts of potential income tax consequences of dividends not practicably determinable related to these subsidiaries. 88 An entity discloses any tax-related contingent liabilities and contingent assets in accordance with Ind AS 37, Provisions, Conti .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... ay be taxed differently; it may for example gain or lose tax incentives or become subject to a different rate of tax in the future. 2 A change in the tax status of an entity or its shareholders may have an immediate effect on the entity’s current tax liabilities or assets. The change may also increase or decrease the deferred tax liabilities and assets recognised by the entity, depending on the effect the change in tax status has on the tax consequences that will arise from recovering or settling the carrying amount of the entity’s assets and liabilities. 3 The issue is how an entity should account for the tax consequences of a change in its tax status or that of its shareholders. Accounting Principles 4 A change in the tax status of an entity or its shareholders does not give rise to increases or decreases in amounts recognised outside profit or loss. The current and deferred tax consequences of a change in tax status shall be included in profit or loss for the period, unless those consequences relate to transactions and events that result, in the same or a different period, in a direct credit or charge to the recognised amount of equity or in amounts recognised in oth .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... rement requirements in Ind AS 12 when there is uncertainty over income tax treatments. In such a circumstance, an entity shall recognise and measure its current or deferred tax asset or liability applying the requirements in Ind AS 12 based on taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates determined applying this Appendix. Issues 5. When there is uncertainty over income tax treatments, this Appendix addresses: (a) whether an entity considers uncertain tax treatments separately; (b) the assumptions an entity makes about the examination of tax treatments by taxation authorities; (c) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and (d) how an entity considers changes in facts and circumstances. Accounting Principles Whether an entity considers uncertain tax treatments separately 6. An entity shall determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments based on which approach better predicts the resolution of the uncertainty. In determining the approach that better predicts the resolution of the unc .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... sible outcomes that are neither binary nor concentrated on one value. 12. If an uncertain tax treatment affects current tax and deferred tax (for example, if it affects both taxable profit used to determine current tax and tax bases used to determine deferred tax), an entity shall make consistent judgements and estimates for both current tax and deferred tax. Changes in facts and circumstances 13. An entity shall reassess a judgement or estimate required by this Appendix if the facts and circumstances on which the judgement or estimate was based change or as a result of new information that affects the judgement or estimate. For example, a change in facts and circumstances might change an entity’s conclusions about the acceptability of a tax treatment or the entity’s estimate of the effect of uncertainty, or both. Paragraphs A1-A3 set out guidance on changes in facts and circumstances. 14. An entity shall reflect the effect of a change in facts and circumstances or of new information as a change in accounting estimate applying Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. An entity shall apply Ind AS 10, Events after the Reporting Period, to .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... to disclose the potential effect of the uncertainty as a tax-related contingency applying paragraph 88 of Ind AS 12. Effective date and transition This Section is an integral part of Appendix C and has the same authority as the other parts of the Appendix C. Effective date B1 An entity shall apply this Appendix for annual reporting periods beginning on or after April 1, 2019. Transition B2 On initial application, an entity shall apply this Appendix either: (a) retrospectively applying Ind AS 8, if that is possible without the use of hindsight; or (b) retrospectively with the cumulative effect of initially applying the Appendix recognised at the date of initial application. If an entity selects this transition approach, it shall not restate comparative information. Instead, the entity shall recognise the cumulative effect of initially applying the Appendix as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate). The date of initial application is the beginning of the annual reporting period in which an entity first applies this Appendix.] Appendix 1 Note: This Appendix is not a part of the Indian Accounting Standard. The purpose o .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... treatment of bargain purchase gain in Ind AS 103, Business Combinations, in comparison to IFRS 3, Business Combination. 10[******] 8[8. Paragraphs 89 to 98D and 98F of IAS 12 related to effective date have not been included in Ind AS 12 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 12, these paragraph numbers are retained in Ind AS 12.] ******************** Notes:- 1. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "(a) interest, royalty or dividend revenue is received in arrears and is included in accounting profit in accordance with Ind AS 115, Revenue from Contracts with Customers, or Ind AS 109, Financial Instruments, as relevant, but is included in taxable profit (tax loss) on a cash basis; and" 2. Inserted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018 3. Inserted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018 4. Substituted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018, before it was read as, "29 When there are insufficient taxable t .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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..... g specified grant from the cost of the related asset as in Ind AS 20." 11. Substituted vide NOTIFICATION No. [F. No. 01/01/2009-CL-V-(Part VII)] dated 30-03-2019 w.e.f. 01-04-2019 before it was read as "20 Ind ASs permit or require certain assets to be carried at fair value or to be revalued (see, for example, Ind AS 16, Property, Plant and Equipment, Ind AS 38, Intangible Assets and Ind AS 109, Financial Instruments). In some jurisdictions, the revaluation or other restatement of an asset to fair value affects taxable profit (tax loss) for the current period. As a result, the tax base of the asset is adjusted and no temporary difference arises. In other jurisdictions, the revaluation or restatement of an asset does not affect taxable profit in the period of the revaluation or restatement and, consequently, the tax base of the asset is not adjusted. Nevertheless, the future recovery of the carrying amount will result in a taxable flow of economic benefits to the entity and the amount that will be deductible for tax purposes will differ from the amount of those economic benefits. The difference between the carrying amount of a revalued asset and its tax base is a temporary .....

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Ind AS - 012 - Income Taxes - Companies (Indian Accounting Standards) Rules, 2015

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