What is the different between current and deferred tax

Answer 1

Current tax refers to the tax amount that a company or individual owes to the government based on their current year's taxable income, while deferred tax refers to the tax amount that is recognized for future tax payments or benefits that arise from temporary differences between the carrying amount (book value) of assets and liabilities in the financial statements and their respective tax bases.

In other words, current tax is the tax that a company or individual has to pay in the current year, while deferred tax is the tax that will be paid or received in future years due to differences in accounting and tax rules. Deferred tax assets represent future tax benefits, while deferred tax liabilities represent future tax obligations.