Defferred Tax Asset & Liability

[Guest]

Dear Sir,

My client is Pvt. Ltd. Company and his accounting figure  for the FY 2011-12.

Deffered Tax Assets Op. Bal -  Rs.10489
Preliminary Expenses as per IT Act                 --  Rs. 17160
Depreciation as per Co. Acts                        -- Rs.69722
Depreciation as per IT. Acts                         ----Rs.83370
Book profit as per P & L A/c. --- Rs.2314052 Including STCG Rs.132902 & LTCG Rs.1408209 on share & Dividend Rs. 19000)

Total Income as per Computation                  --- Rs.873200

Tax on total income       --- Rs. 2,49,285 (STCG 20533+Normal tax 228752)

Minimum alternative tax --- Rs. 437316
(on Book Profit 2314052-19000)

What is the amount of Defferred tax asset or Defferred tax liability to be recognized in current year.

And how to pass the journal entries in accounts.

Thanks & Regards

[CAGOPALJI AGRAWAL]

Your querry is not disclosing complete facts like preliminary as per it act,then what is the total expenses etc. 

[Guest]

Prelimery Exps.   ====  Rs.19800 (For Share Capital Increase)
Prelimery Exps.   ====  Rs.66000 (For Share Capital Increase)
                                                  ========
Total Exps.                               85800
                                                  ========

Total Exps. 85800 /5 Years = 17160 (Deduction u/s 35 D of  IT Act 1961.)

AI Summary

Deferred tax recognition due to book-tax timing differences from depreciation and preliminary expenses; compute and record DTA/DTL. The company reports book-tax timing differences due to higher depreciation under tax law and amortisation/deduction treatment of preliminary expenses. The question is to compute the deferred tax asset or liability for FY 2011-12 and the journal entries to record the deferred tax, taking into account reported book profit, taxable income, tax on total income, and the separate Minimum Alternative Tax basis.