Hii guys,

Whether a company while preparing its first balance sheet is required to make deferred tax expense if it is having profit in its accounting books however having loss as per computation.

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If loss (as per income tax) is computed due to temporary difference i.e depreciation then only having deferred tax liability is created.

If loss (as Per Income tax) is computed permanent difference then there is no deferred tax liability is not created.

so, in this case, deferred tax liability is created. so entry is on 31 march

Profit and loss appropriation Dr

                   To deferred tax liability

and for next year, this should be reversed.

so entry is

Deferred tax liability Dr

To Profit and loss appropriation A/c

You have to determine first that this loss is occuring due to what differences. Those difference are temporary or permanent. If these are temporary then create the Deferred tax liability on 31st march. If these are permanent defference then igone the all difference. 

Deffered tax liability will be created on the amount of temporary difference * tax rate.

Profit & Loss Appropriation Dr.

   To Deferred tax liablity

and in the next year, you will reverse it on the base of what differences are reversed.