Deffered tax is either tax asset or tax liability. It is 
temporary difference between book (accounting) value of 
assets and liabilities, and their tax value.

deferred tax is the future tax liab or asset due to diff in 
the taxable value and original value of an asset...

difference bitbeen depreciation as per income tat & 
depreciation as per company

deferred tax is the future tax liab or asset due to diff in 
the taxable value and original value of an asset...

Deffered Tax is a provision made for the expenditure to be 
incurred in future

Differed Tax is difference in the tax liability as per 
Accounting profit and Tax liability as per Income tax Act 
(sec 115JB).

Differed tax araises due to timing differences of 
recognition of various tax deductible transactions in both 
Accounting and tax calculations.

Eg: Depreciation on Fixed Assets.

for example As per companies act one asset is eligible for 
100% depreciation in the first year itself, but the case 
may not be the same under sec 32 of the Income tax act it 
may gives some other rate of depreciation on that 
asset.lets assume it allows only 50% in the first year and 
remaining in the subsequent year.

as per accounting books shows a lower profit and tax 
liabiltity due to higher depreciation claimed in this year 
ony compared to IT profit.

It is a clear case of Differed tax asset..... we will pay 
more in this year we will carry it as a differed tax asset 
in our balance sheet which is going to be offset in the 
coming year...... in the short range period difference will 
apprear but in long range timing difference is going to be 
setoff.....


One more thing Differed tax will not araise due to 
permanent differences between these two profits.

If you reverse the above example it will give the situation 
of differed tax Liability.

A tax liability that a company owes and does not pay at 
that current point, although it will be responsible for 
paying it at some point in the future. This is often caused 
by a difference in a company's balance sheet, due to the 
differences between accounting practices and tax 
regulations. Occasionally, a company will have a difference 
in their taxable income and income before tax due to these 
differences, resulting in a deferred tax liability.

deffered tax is nothing but saving the money for the future 
safety particularly deals with the tax inspite of 
depriciation.