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).  Permanent differences → no DTA

    Practice Next
    More Accounts Questions

    Relevant for Exams:

    ask-question