11-21-2009, 01:50 AM
Kamran bahi thanks a lot for replying.you have helped me a lot. please dont mind but My answer and objections to your reply is as follows
1. <b>Posted by you</b>"Against this accounting base, the tax base will also be taken excluding freehold land and leased assets (under finance lease). You have not given tax base of leased assets (USED BY YOU) so calculations will have to be made by you"
<b>MY REPLY</b>
i didnot give any tax base because as per ITO,2001 only leased rentals are allowed. so tax base of leased assets will always be zero. hence deferred tax liability will come as Rs.(563,170,374-214,445,468)*35%= Rs. 122,053,717 liability. please tell whether there is any possibility that tax base of leased assets will be any value other than zero in the books of lesses
2.<b>POSTED BY YOU</b>
"Tax losses are Rs. 6,633,725. These cannot simply be added/deducted form deferred tax calculation. Rather the tax impact has to be calculated at 35% (rate being used.) Since the tax losses carry a debit balance so these will give rise to a taxable temporary difference. Deferred tax impact @35% is Rupees 2,321,804.
Here your calculation was wrong."
<b>MY REPLY</b>
sir, i used the word Minimum tax with losses. this means this is the excess of turnover tax over the normal tax (although not applicable for tax year 2009 ). These amounts represent actual amount of tax paid. Hence whole tax paid will be taken as deferred tax asset amounting to Rs.6,633,725.
one thing i wana confirm from you is that when we create deferred tax asset@35% on business losses what will we do after six years. as it can only be carried forward upto six years.
3.balance deferred tax liability will come as Rs.121,233,628-76,788,729=44,444,899@35% and this will come to Rs. 15,555,715
Hence final deferred tax liability will be Rs.122,053,717+15,555,715-6,633,725=Rs.130,975,707.
i think my original calculation is right.
i will definitely look into other matters as mentioned in your reply
1. <b>Posted by you</b>"Against this accounting base, the tax base will also be taken excluding freehold land and leased assets (under finance lease). You have not given tax base of leased assets (USED BY YOU) so calculations will have to be made by you"
<b>MY REPLY</b>
i didnot give any tax base because as per ITO,2001 only leased rentals are allowed. so tax base of leased assets will always be zero. hence deferred tax liability will come as Rs.(563,170,374-214,445,468)*35%= Rs. 122,053,717 liability. please tell whether there is any possibility that tax base of leased assets will be any value other than zero in the books of lesses
2.<b>POSTED BY YOU</b>
"Tax losses are Rs. 6,633,725. These cannot simply be added/deducted form deferred tax calculation. Rather the tax impact has to be calculated at 35% (rate being used.) Since the tax losses carry a debit balance so these will give rise to a taxable temporary difference. Deferred tax impact @35% is Rupees 2,321,804.
Here your calculation was wrong."
<b>MY REPLY</b>
sir, i used the word Minimum tax with losses. this means this is the excess of turnover tax over the normal tax (although not applicable for tax year 2009 ). These amounts represent actual amount of tax paid. Hence whole tax paid will be taken as deferred tax asset amounting to Rs.6,633,725.
one thing i wana confirm from you is that when we create deferred tax asset@35% on business losses what will we do after six years. as it can only be carried forward upto six years.
3.balance deferred tax liability will come as Rs.121,233,628-76,788,729=44,444,899@35% and this will come to Rs. 15,555,715
Hence final deferred tax liability will be Rs.122,053,717+15,555,715-6,633,725=Rs.130,975,707.
i think my original calculation is right.
i will definitely look into other matters as mentioned in your reply