Page 2 - 2. COMPILER QB - INDAS 12

INDAS – 12

INCOME TAXES

(TOTAL NO. OF QUESTIONS – 15)

INDEX

S.No. Particulars Page No.
1 RTP Questions 2.1

2 MTP Questions 2.8

3 Past Exam Questions 2.16
4 Newly Added Questions by ICAI 2.19

RTPs QUESTIONS

Q1 (MAY 18)

A’s Ltd. profit before tax according to Ind AS for Year 20X1-20X2 is Rs 100 thousand and taxable profit for
year 20X1-20X2 is Rs 104 thousand. The difference between these amounts arose as follows:

On 1st February, 20X2, it acquired a machine for Rs 120 thousand. Depreciation is charged on the machine on
a monthly basis for accounting purposes. Under the tax law, the machine will be depreciated for 6 months.

The machine’s useful life is 1

0 years according to Ind AS as well as for tax purposes. In the year 20X1-20X2, expenses of Rs 8 thousand
were incurred for charitable donations. These are not deductible for tax purposes.
You are required to prepare necessary entries as at 31st March 20X2, taking current and deferred tax into

account. The tax rate is 25%.
Also prepare the tax reconciliation in absolute numbers as well as the tax rate reconciliation.

SOLUTION

Current tax= Taxable profit x Tax rate = Rs 104 thousand x 25% = Rs 26 thousand.

Computation of Taxable Profit:

Rs in thousand
Accounting profit 100
Add: Donation not deductible 8

Less: Excess Depreciation (4)
Total Taxable profit 104

2.1