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Deferred Tax Calculator (DTA / DTL)

Free deferred tax calculator for Indian companies: work out the Deferred Tax Asset (DTA) and Deferred Tax Liability (DTL) from book-vs-tax base differences under AS 22 or Ind AS 12, with the recognition test for each. Default items are pre-populated for a typical company; adjust per engagement.

Items + book vs tax base
ItemBook base (₹)Tax base (₹)DiffTypeDTADTL
PPE — book WDV vs IT WDV₹15,00,000DTL—₹3,77,550
Provision for gratuity (allowed on payment)₹5,00,000DTA₹1,25,850—
Provision for leave encashment₹3,50,000DTA₹88,095—
Provision for bonus (43B carve-out)₹2,00,000DTA₹50,340—
Provision for doubtful debts₹4,00,000DTA₹1,00,680—
Carry-forward of unabsorbed depreciation / losses (tax base only)₹-20,00,000DTA₹5,03,400—
Total₹8,68,365₹3,77,550
Assumptions
Accounting framework
Ind AS 12 — balance-sheet approach: temporary differences between carrying amount and tax base. The arithmetic below is exactly this.
Applicable income-tax rate (%)
Use the marginal effective rate that will apply when the timing difference reverses (typically 25.17% for new regime, 30%+ for old regime + surcharge / cess).
DTA recognition — is future taxable profit available?
Ind AS 12: DTA is recognised to the extent it is probable that future taxable profit will be available. Where the entity has a history of recent losses, DTA on unused losses needs convincing other evidence. This switch applies to the whole DTA total; assess losses separately if the two tests differ.
Result
Total DTA (gross)₹8,68,365
DTA recognised₹8,68,365
Total DTL (gross)₹3,77,550
Net deferred tax₹4,90,815
Net DTA — disclose as non-current asset in BS.

DTA vs DTL, and AS 22 vs Ind AS 12.

A Deferred Tax Liability (DTL) means tax you will pay later on something already recognised in the books (tax depreciation running ahead of book depreciation). A Deferred Tax Asset (DTA) means tax relief you will get later (provisions not yet allowed, carried-forward losses). AS 22 works from timing differences between accounting income and taxable income; Ind AS 12 works from temporary differences between carrying amount and tax base.

The material difference is recognition of DTA: AS 22 asks for “reasonable certainty” of future taxable income (and “virtual certainty supported by convincing evidence” for unabsorbed depreciation and losses); Ind AS 12 asks whether it is “probable” that taxable profit will be available, with convincing other evidence where there is a history of losses. DTLs are recognised in full under both.

On CORAA
Deferred tax audit-evidence and rate / recoverability working papers run through the Working Papers hub; tie to Deferred Tax Liabilities WP template.
Deferred Tax WP templateMore calculators

How the deferred tax calculator works (DTA and DTL)

For each item, take the book carrying amount and the tax base. The difference multiplied by the tax rate expected to apply when it reverses is the deferred tax. For an asset, book above tax base is a taxable difference and gives a DTL; book below tax base gives a DTA. For a liability the direction is mirrored: a provision the tax law allows only on payment (gratuity, leave encashment, Section 43B items) has a book amount above its tax base and gives a DTA. Net deferred tax = recognised DTA less DTL.

Ind AS 12 (Income Taxes) is a balance-sheet approach built on temporary differences. AS 22 (Accounting for Taxes on Income) is an income-statement approach built on timing differences between accounting income and taxable income. For common items such as depreciation and disallowed provisions the amount is the same under both; the frameworks differ mainly on when a DTA may be recognised and on Ind AS 12 covering differences that arise outside profit or loss (OCI, business combinations).

DTA recognition. AS 22: reasonable certainty of future taxable income for timing differences, and virtual certainty supported by convincing evidence for unabsorbed depreciation and carried-forward losses. Ind AS 12: recognised to the extent it is probable that future taxable profit will be available; a history of recent losses calls for convincing other evidence. DTLs are recognised in full under both. This calculator applies one recognition switch to the whole DTA, so assess loss-related DTA separately if the tests give different answers.

Worked example — book vs tax depreciation (DTL)

Plant with book WDV of ₹60 Cr and tax WDV of ₹45 Cr. Tax rate 25.17% (Section 115BAA).

Inputs
Book carrying amount₹60 Cr
Tax base (tax WDV)₹45 Cr
Taxable temporary difference₹15 Cr
Tax rate25.17%
Output
Deferred Tax Liability₹3.78 Cr (15 × 25.17%)
PresentationNon-current liability, unless offset criteria are met
Tax depreciation ran ahead of book depreciation, so tax was paid earlier than the books recognise it and the difference reverses later. Add a ₹5 lakh gratuity provision allowed only on payment: book ₹5 lakh, tax base nil, DTA = ₹5 lakh × 25.17% = ₹1.26 lakh, recognised only if the recognition test is met. Net deferred tax = DTA less DTL.

Common mistakes

Offsetting DTA and DTL without meeting the conditions
Offset only where there is a legally enforceable right to set off current tax assets and liabilities and the balances relate to income taxes levied by the same authority (Ind AS 12 para 74; AS 22 has an equivalent rule). Do not net across group entities by default.
Recognising DTA with no evidence of future taxable profit
Reasonable certainty (AS 22) or probability (Ind AS 12) must be supported by forecasts, reversing taxable differences or tax planning. For losses under AS 22 the bar is virtual certainty with convincing evidence. Reassess at every reporting date.
Using the wrong tax rate
Use the rate enacted or substantively enacted at the reporting date that will apply when the difference reverses. Companies that opted for Section 115BAA use 25.168%; remeasure balances when the regime changes.
Routing OCI items through profit or loss
Deferred tax on items recognised in OCI or equity (revaluation, actuarial remeasurement, cash-flow hedges) follows the underlying item (Ind AS 12 para 61A).
Treating permanent differences as temporary
Expenses never deductible and income never taxable do not reverse and create no deferred tax.

Frequently asked questions

What is a deferred tax calculator?+
A deferred tax calculator computes the tax effect of differences between accounting and tax treatment. For each item it compares the book carrying amount with the tax base, applies the expected tax rate, and classifies the result as a Deferred Tax Asset (DTA) or Deferred Tax Liability (DTL). This one supports the AS 22 and Ind AS 12 recognition tests.
What is the difference between DTA and DTL?+
A DTL is tax payable in future on income or gains already recognised in the books, for example tax depreciation exceeding book depreciation. A DTA is tax recoverable in future, for example provisions deductible only when paid or carried-forward losses. A DTA is recognised only if future taxable profit is expected; a DTL is recognised in full.
What is the difference between AS 22 and Ind AS 12?+
AS 22 is an income-statement approach based on timing differences; Ind AS 12 is a balance-sheet approach based on temporary differences. The main practical difference is DTA recognition: reasonable certainty (virtual certainty for losses) under AS 22, versus probable future taxable profit under Ind AS 12. Ind AS 12 also captures differences outside profit or loss.
When is a deferred tax asset recognised?+
Under AS 22, when there is reasonable certainty of future taxable income, and virtual certainty supported by convincing evidence for unabsorbed depreciation and carried-forward losses. Under Ind AS 12, to the extent it is probable that future taxable profit will be available. Both are reviewed at each reporting date.
What tax rate is used for deferred tax?+
The rate enacted or substantively enacted by the reporting date that is expected to apply when the difference reverses. For companies under Section 115BAA this is 25.168% (22% plus 10% surcharge plus 4% cess).
Can deferred tax be discounted?+
No. Both AS 22 and Ind AS 12 prohibit discounting deferred tax balances.
How is MAT credit treated?+
Under Ind AS, MAT credit entitlement under Section 115JAA is treated as a deferred tax asset subject to the recognition test. Under AS 22 it is recognised as MAT credit entitlement when there is convincing evidence of set-off. Companies on Section 115BAA do not carry MAT credit.

Authoritative sources

MCA
AS 22 — Accounting for Taxes on Income (Companies (Accounting Standards) Rules, 2021) — Timing-difference approach; reasonable and virtual certainty tests.
CBDT
Income-tax Act sections 115BAA and 115JAA — Concessional regime rate and MAT credit.
Always confirm against the latest version of the source. Regulations evolve and amendments are common.
Related calculators
Schedule II Depreciation →Gratuity Calculator →Schedule III Validator →Deferred tax under Ind AS 12 →Deferred Tax WP template →
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Last reviewed: 2026-09-26 · For informational purposes only — not professional advice.