Amber Ltd bought a building for ₹20,00,000 (life 4 years, nil scrap). Accounting depreciation is straight-line; tax depreciation is 50% in year 1, 50% in year 2 and nil thereafter. Tax rate 30%. What is the deferred tax for year 1, and is it an asset or a liability?

1. Deferred tax = timing difference × tax rate = ₹5,00,000 × 30% = ₹1,50,000. 2. Tax depreciation exceeds accounting depreciation, so taxable income is currently lower than accounting income. 3. This will reverse later (more tax payable then), so it is a deferred tax liability of ₹1,50,000. _Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 — Q.1(a), AS 22 Accounting for Taxes on Income._