DEFERRED TAX LIABILITY ON CREATION OF SPECIAL RESERVE UNDER SECTION 36(1)(viii) OF THE INCOME TAX ACT, 1961

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..... under Section 36(1) (viii) of Income Tax Act, 1961 (hereinafter referred to as 'Special Reserve'), in terms of which, only the net amount of such Special Reserve (net of tax payable) should be taken into account for the purpose of computation of Tier-I capital. 2. In this context, it has been observed that some banks are not creating deferred tax liability (DTL) on Special Reserve as per Acc .....

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..... financial statements for the financial year 2013-14. (b) DTL for amounts transferred to Special Reserve from the year ending March 31, 2014 onwards should be charged to the Profit and Loss Account of that year. 5. In view of the requirement to create DTL on Special Reserve, banks may reckon the entire Special Reserve for the purpose of computing Tier-I Capital. - Circular - Trade Notice - Pu .....

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