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TMI BlogDefered TaxX X X X Extracts X X X X X X X X Extracts X X X X ..... Defered Tax X X X X Extracts X X X X X X X X Extracts X X X X ..... ble of setting off due to differences in Companies act and Income Tax Act, Eg. Depreciation under Companies Act is 10% and Income Tax Act is 13%. Hence we got income tax benefit on 3% extra. Hence our liability during the current year will be less and in future liability will be more and deferred tax liability will be Rs. (Depreciation as per IT-Depreciation as per Companies Act) multiplied by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax rate. Reply By Prasanna K: The Reply: Deferred Tax is created on the Difference Between Accounting Income (Net Profit before Tax) and Taxable income (as per Income Tax Act, 1961). As per the standard deferred tax has to be recognised on all Timing difference i.e. a difference occured in a year and capcable of reversal in another year. for eg. Disallowance of expense for Non deduction of TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S which is allowable in future years. Prelininary expense u/s.35D, Depreciation difference between IT Act and Companies act In case of permanent difference i.e. it does not have a capability for reversal in another year. For Interest and Penalty etc. ROC Fees for increase in Capital (disaalowd under IT), Companies act depreciation on Revalued portion etc are the cases which require adjustment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable profit but not allowed subsequesntly. X X X X Extracts X X X X X X X X Extracts X X X X
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