Page 247 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 60-146 Consolidated

for current tax is calculated using tax rates and Current and deferred tax are recognised as
tax laws that have been enacted or substantively an expense or income in the statement of
enacted by the end of the reporting period. consolidated Statement of Profit and Loss, except
when they relate to items credited or debited
Current tax assets and current tax liabilities are either in other comprehensive income or directly
offset when there is a legally enforceable right to in equity, in which case the tax is also recognised
set off the recognised amounts and there is an in OCI or directly in equity.
intention to realise the asset or to settle the liability Deferred tax assets include a credit for the Minimum
on a net basis. Alternate Tax (‘MAT’) paid in accordance with the
tax laws, which is likely to give future economic
Deferred tax is the tax expected to be payable or benefits in the form of availability of set off against
recoverable on differences between the carrying future income tax liability. MAT asset is recognised
values of assets and liabilities in the Financial as deferred tax assets in the Consolidated Balance
Statements and the corresponding tax bases Sheet when the asset can be measured reliably,
used in the computation of taxable profit and is and it is probable that the future economic benefit
accounted for using the balance sheet liability associated with the asset will be realised.
method. Deferred tax liabilities are generally Deferred tax liabilities are recognised for
recognised for all taxable temporary differences taxable temporary differences associated with
arising between the tax base of assets and investments in subsidiaries and interests in joint
liabilities and their carrying amount, except when ventures, except where the Group is able to
the deferred income tax arises from the initial control the reversal of the temporary difference
recognition of an asset or liability in a transaction and it is probable that the temporary difference
that is not a business combination and affects will not reverse in the foreseeable future. Deferred
neither accounting nor taxable profit or loss at tax assets arising from deductible temporary
the time of the transaction. In contrast, deferred differences associated with such investments and
tax assets are only recognised to the extent that interests are only recognised to the extent that
it is probable that future taxable profits will be it is probable that there will be sufficient taxable
available against which the temporary differences profits against which to utilise the benefits of the
can be utilised. temporary differences and they are expected to
reverse in the foreseeable future.
The carrying value of deferred tax assets is
reviewed at the end of each reporting period and 2.27 Provisions and contingencies
reduced to the extent that it is no longer probable A provision is recognised when the Group has a
that sufficient taxable profits will be available to present obligation as a result of past events and
allow all or part of the asset to be recovered. it is probable that an outflow of resources will
be required to settle the obligation, in respect
Deferred tax is calculated at the tax rates that are of which a reliable estimate of the amount can
expected to apply in the period when the liability be made. Provisions are determined based on
is settled or the asset is realised based on the best estimate required to settle the obligation
tax rates and tax laws that have been enacted or at the Balance Sheet date. When a provision is
substantially enacted by the end of the reporting measured using the cash flows estimated to settle
period. The measurement of deferred tax liabilities the present obligation, its carrying amount is the
and assets reflects the tax consequences that present value of those cash flows (when the effect
would follow from the manner in which the Group of the time value of the money is material). The
expects, at the end of the reporting period, to increase in the provisions due to passage of time
cover or settle the carrying value of its assets and is recognised as interest expense. Provisions are
liabilities. reviewed as at each reporting date and adjusted
to reflect the current estimate.
Deferred tax assets and liabilities are offset to the Provisions are reviewed at each Balance Sheet
extent that they relate to taxes levied by the same date and adjusted to reflect the current best
tax authority and there are legally enforceable estimate. If it is no longer probable that the
rights to set off current tax assets and current tax outflow of resources would be required to settle
liabilities within that jurisdiction. the obligation, the provision is reversed.

245