HOW TO MEASURE DEFERRED TAX WHEN A COMPANY PAYS TAX AS PER MAT

HOW TO MEASURE DEFERRED TAX WHEN A COMPANY PAYS TAX AS PER MAT
TERMS TO BE KNOWN:
CURRENT TAX:  It is the amount of income tax determined to be payable (recoverable) in respect of the taxable income (tax loss) for a period.
DEFFERED TAX:  It is the tax effect of timing differences.
TIMING DIFFERENCES: The differences between taxable income and accounting income for a period that originates in one period and is capable of reversal in one or more subsequent periods.
PERMANENT DIFFERENCES: are the differences between taxable income and accounting income for a period that originate in one period and do not reverse subsequently
ACCOUNTING INCOME  (LOSS): It  is the net profit or loss for a period, as reported in the statement of profit and loss, before deducting income tax expense or adding income tax saving.
TAXABLE INCOME (TAX LOSS): It is the amount of the income (loss) for a period, determined in accordance with the tax laws, based upon which income tax payable (recoverable) is determined.
TAX EXPENSE (TAX SAVING): It is the aggregate of current tax and deferred tax charged or credited to the statement of profit and loss for the period.
1.       AS PER AS-22 THE DEFFERED TAX ASSET/LIABILITY IS CREATED ONLY WHEN THERE EXISTS ANY TIMING DIFFERENCE.
2.       TIMING DIFFERENCE MEANS DIFFERENCE IN ACCOUNTING INCOME AND TAXABLE INCOME.
3.       IF A COMPANY PAYS TAX U/S 115 JB OF INCOME TAX ACT THEN, FOR RECOZNIGING DEFFERED TAX WHICH TAX WE HAVE TO TAKE AS CURRENT TAX IS A BIG QUESTION?
4.       AS PER ASI-6 FOR MEASUREMENT OF DEFFERED TAX ASSET/LIABILITY THE CURRENT TAX IS ALWAYSREGULAR INCOME TAX RATE.
5.       EVEN IF A COMPANY PAYS TAX USING 115 JB PROVISIONS THEN ALSO FOR CALCULATING DEFFERED TAX LIABILITY/ASSET THE TAX RATE IS REGULAR INCOME TAX RATE (AT PRESENT @ 30%) BUT NOT TAX RATE U/s 115 JB OF INCOME TAX ACT.
FOR BETTER CLARITY PLEASE SEE THE BELOW MENTIONED ILLUSTRATION:
PROBLEM:
ACCOUNTING INCOME: Rs. 5, 00,000-
TAXABLE INCOME        :   Rs. 2, 00,000-
INCOME U/S115JB       :   Rs. 4, 00,000-
SOLUTION:
CURRENT TAX: (200000*30%)= 60000/-
DEFFERED TAX LIABILITY: {(500000*30%)-(200000*30%)} = 1, 50,000-60,000 =Rs.  90,000-
MAT CREDIT: 74000-60000= Rs. 14000/- {(400000*18.5%)-(200000*30%)}
EXPENSES DEBITED TO P&L A/C: 90000+60000+14000=Rs. 1, 64,000/-

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