how to calculate deferred tax on gratuity

Question

if i make provision for Gratuity payment then how could i calculate the deferred tax on that gratuity provision amount?

Answer 1

Just apply the income tax rate to the gratuity provision recognized which is recognized as a deductible temporary difference.

http://***.ifrsanswer.***/316/gratuity-in-deferred-tax-provision

Comments

Thanks for answering the question. But still i am not clear. could you please explain little bit more.

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lets say your gratuity provision is $1000 & your effective income tax rate is 25%, then the temporary difference identified is 1000x25=250