Interested to Buy Any Domain ? << Click Here >> for more details...
What is Deferred tax??
- 2 Answers
- 9130 Views
- QX Limited, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / barodianbuddy(acca)
deferred tax arises because accounting profit will not be equal to taxable profit. The reason can be split into 2 categories:
1. permanent difference:- items that would have been used in calculating accounting profit but would not be used in calculating taxable profit. eg entertaining expenses (UK tax)
2. TEMPORARY DIFFERENCE:- Items that would have been used in calculating accounting profit and taxable profit but in different accounting periods. eg depreciation/tax allowances.
IAS 12 considers only the temporary differences.
| Is This Answer Correct ? | 4 Yes | 3 No |
Answer / jejeswara reddy
The need for deferred tax accounting arises because companies often postpone or pre-pays taxes on profits pertaining to a particular period.
1.deferred tax Liability
2.deferred tax asset
1.deferred tax Liability: There may be a difference in the way certain items of expense are allowed to be treated for tax purposes and how a company actually treats them.
Tax laws allow full depreciation in the first year after a company acquires certain assets. However a company may actually write off the depreciation over several years on its financial statements. The company may charge depreciation at lower rates than allowed under tax laws. Or it may use a different method of charging depreciation.
2.deferred tax asset: The tax laws may not recognize some of the expenses that a company has accounted for in its accounts. For instance, provisions made at the discretion of the management, such as those for bad debts, which are not fully recognized by tax authorities.
In such cases, a company is actually pre-paying taxes pertaining to future years. For the year, the profits that the taxman calculates would be higher than those computed by the company. Therefore a company would save on tax in the years when the expenses or provisions actually materialize.
Adjusting for a deferred tax asset :
There are two classifications for a deferred tax asset:
1. Expense:
a. Is a bonifide GAAP expense today
b. It is not a tax deduction today
Is NOT subtracted from the cash flow calculation
2. Revenue
a. Not a bonifide GAAP expense today
b. It is however taxable income.
Subtracted from the cash flow calculation
| Is This Answer Correct ? | 0 Yes | 0 No |
if we sent our goods for selling purpose to our agents outsight the state, is there any need of sending c form to him or form 38
ANY differenece between income tax and tds
when charges PURCHASE @ 12 % TAX RATE ?
we are purchasing kraft paper is there any question entry tax over kraft paper as per the orissa entry tax rules. and if so what is percentage of entry tax.
Ganesh & Gopal joined a firm drawing salary of Rs 25000 per month.After serving 3 yrs ,they started business of their own in partnership,contributing Rs200000(expected life 10 yrs,bought spare parts worth Rs 33000 from Kundu on credit.Office supplies were purchased for cash.Initially they were very busy in conducting their business operations but by the end of the 1st year,31/12/2005 they were disappointed when they found their bank balances.Following is the summary of their bank statement. Receipts: Share Capital Rs 250000 Collections from Customers 412000 Payments: Equipment 200000 Salaries of Assistants 88000 Rent advance for 2 yrs 96000 On-year ins. Policy on equipment 12000 Office stationery 27000 Payment to Kundu 29000 Withdrawals of Ganesh 90000 Withdrawals of Gopal 90000 Closing balance c/d 30000 ----------- Total : 6,62,000 Still amount receivable from customers for services to them amounted to Rs 30,000 & closing balance of office stationery is Rs2000,spare parts Rs2600 were utilised by the end of the year .Prepare trial balance with the available information and show total. Also what is the net profit.
where is applicable WCT & what is limitation for applicable it on company.
i want current year tax deduction source please let me know?
What is tha Central sales tax rate 2010 in andhrapradesh
Can u provided all the dues date and depositing date which are used in general manner or Income tax..
A Old Government Job retired Personnel who is getting his Pension amount@Rs.11000/- per month. He has put his retirement Fund in Bank Deposit for 1 year. No Bank is deducted TDS on that amount. Do we have any way by which his TDS can be refunded or saved
WHAT IS THE PROVISION OF TDS RECEIVABLE AT THE TIME OF YEAR ENDING GIVE THE EXAMPLE WITH ENTERY ON MY E.MAIL sonidilip87@yahoo.com
if i purchased a tally software CD, Am i liable to pay service tax on it or sales tax or both on it?
Audit 
