Tuesday , June 25 2024


Any company are prepared pretax income statement for book purpose also they are compute tax for govt. tax regulation purpose respectively. So, for that two reasons some differences are exist, for example, in the timing of revenue recognition and the timing of expenses recognition.

The definition of deferred tax asset and liabilities are-

The deferred tax consequenes attributable to taxable temporary differences.


ABC Company pretax income BDT. 100000, Depreciation Charge in income statement is BDT. 30000 but tax purpose depreciation is BDT. 46000.


Rent income shown BDT. 120000, but Tax authority measure BDT. 22000 more.


Fine imposed for pullution shown as expenses BDT. 11000.


Tax Rate 30%

DTL = Deferred Tax Liability = Excess Depreciation to be charged as per tax authority.

Amount = BDT. 46000-30000 = 16000

DTA = Deferred Tax Asset = Excess Rent income Charged as per tax Authority.

Amount = BDT. 22000

So, Taxable income = (income as per book + non-allowable expenses) + Deferred tax asset (DTA) item – Deferred Tax Liability (DTL) item

=BDT.  (100000+11000)+22000-16000

= BDT. 116000

So, Journal Entry:

Dr. Income tax Expenses (100000+11000)*30%                             BDT. 33300

Dr. Deferred tax asset (22000*30%)                                                   BDT. 6600

Deferred tax liability (16000*30%)                                                           BDT. 4800

Income tax payable ( 116000*30%)                                                         BDT. 35100


if you have any queries please comments.

(Visited 89 times, 1 visits today)

About Imran

Be a perfect human for every one.

Check Also

Tax Deduct at Source Non-rasident

Deduction of tax at source from non-resident taxpayer’s income (Section 56)

অনিবাসী করদাতার আয় হতে উৎসে কর কর্তন (ধারা ৫৬): অর্থ আইন, ২০১৯ এর মাধমে আয়কর …

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.