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      Question

      Under the Income-tax Act, Deferred Tax Asset is

      recognized when:
      A There is a permanent difference Correct Answer Incorrect Answer
      B Taxable income is higher than accounting income Correct Answer Incorrect Answer
      C Deductible temporary differences exist Correct Answer Incorrect Answer
      D Advance tax is paid in excess Correct Answer Incorrect Answer

      Solution

      Deferred Tax Asset arises when future taxable income will be lower because the company can claim deductions later. Examples: provision for doubtful debts, unabsorbed losses (subject to conditions).┬а Permanent differences тЖТ no DTA

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