Re: [aaykarbhavan] Query reltated to Income tax (deffered tax liab)

In my view, You need to recognise deferred tax liability on all timing differences (including depreciation difference) capable of reversal in future. You may not recognise the same if company intends to pay MAT forever which, i doubt would be the case, as income tax unabsorbed losses would not be carried forward for more than stipulated period.

 

DTL is to be recognised on the applicable normal tax rate (i.e. 30%+ SC+EC) even if company has paid MAT.

 

You may also recognise Deferred Tax Asset on unabsorbed depreciation and losses, if the same is virtually certain to be realised in future supported by convincing evidence. If convincing evidence is not available, DTA may be ignored and only DTL (gross) to be recognised.

 

Hope above resolves your query.

 

Regards,

Shripal Shah

From: ram agrawal <ram9ag@yahoo.com>
To: aaykarbhavan@yahoogroups.com
Sent: Wednesday, May 29, 2013 9:20 AM
Subject: Re: [aaykarbhavan] Query reltated to Income tax (deffered tax liab)

 

Dear all, pl expedite your opinion on my query as we have file annual statements by 30 th May. being listed company. Regards Ram --- On Tue, 5/28/13, ram agrawal <ram9ag@yahoo.com> wrote: From: ram agrawal <ram9ag@yahoo.com> Subject: Re: [aaykarbhavan] Query reltated to Income tax (deffered tax liab) To: aaykarbhavan@yahoogroups.com Date: Tuesday, May 28, 2013, 9:29 AM   Dear colleagues,  Our company is paying income tax Under MAT since last two three years.In case of MAT tax is paid on book profit. In this book profit depreciation as per books is claimed and depreciation as per income tax does not have any relevance. Now my query is that in such scenario  whether we should show deferred tax liability  on account of difference in depreciation claim as per income tax(higher) and as per book profit since we are not considering income tax deprecation for paying MAT.Hoping for an early reply as we have to finalize accounts by 30th May. Regards Ram agrawal ---

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