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Deferred tax arises on the difference between income as per books of accounts (following the method of Companies Act) and income as per The Income Tax Act.
The permanent differences are ignored and temporary differences are taken into account.
Whether an asset is being created or a liability needs to be checked - If the taxable income as per The Income Tax Act is greater than the income as per The Companies Act, then a deferred tax asset is created and vice versa.
The tax is calculated at the tax rate applicable to such entity multiplied with the differential amount (difference between income calculated as per The Companies Act and The Income Tax Act).