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sir can we say that tax base of an item will always be zero if tax is charged on cash received basis and tax is credited on a cash paid basis.
In simple words whether receipts or payments, cash basis is used for tax purposes, then tax base will ALWAYS be zero?
Don’t sue me over it but it looks like a reasonable rule of thumb.
Normally tax base is zero – main exception is writing down PPE where accounting depreciation is different to tax allowances.
No particular marks for the word ‘tax base’ – what the examiner is looking for is the ‘temporary difference’.
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