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INCOME TAX · PUBLIC AND LISTED COMPANIES

Deferred Tax Made Simple: Why Book Profit and Taxable Profit Differ

Understand deferred tax assets and liabilities through depreciation, losses and a practical year-end review.

By Vyapar Setu Online | Public and listed companies · 28 October 2026

Account books compared to understand differences between book and taxable profit

Business Income Tax series · Public and listed companies · Article 13 of 27

A company can report one profit to shareholders and a different taxable profit to the tax department. Often neither figure is wrong: accounting rules and tax rules recognise the same item at different times.

Read the year first: Reviewed 28 October 2026. Tax Year 2026–27 uses the Income-tax Act, 2025 and Rules, 2026. Returns for FY 2025–26 / AY 2026–27 use the earlier framework. This guide identifies relevant old section names and current changes; apply each limit to its stated period.

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For learning and preparation. Verify the rules and official guidance for your period and circumstances before making a filing or tax decision.

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