28 December 2013
Hello friends, I have a query regarding set off of unabsorbed depreciation against short term gain. Ex.- During the previous year, a company earn Rs.20 lakhs short term capital gain by selling its fixed assets. In the same year company have loss of Rs.10 lakhs under the head income from Business/ profession. The unabsorbed depreciation of the company is Rs.25 lakhs carried forward from last previous year.
My query is whether the unabosrbed depreciation can set off against the short term capital gain after adjustment of current year loss.
28 December 2013
No it cannot be it is to be adjusted only against business income. Why because the loss is from the head profit and gains of the business so you cannot adjust the same against ST income
As per the provisions of the Income Tax Act, Loss from business and profession can also be set off against income from other sources except income from owning and maintaining horse races, and lotteries and winnings from crossword puzzles.
Therefore the brought forward un-absorbed depreciation can be set off against interest income
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