30 July 2010
Normal depreciation is considered a legitimate deduction in determining profits. If profits are not adequate, the unabsorbed depreciation allowance can be carried forward to the next assessment year. In this respect, it is similar to unabsorbed business loss.
Unabsorbed depreciation is the amount of depreciation which the assessee couldnt claim as expenditure in his profit and loss account due to lack of sufficient credit in the credit side of p&l account or other expenses.. such loss in p&l account due to the excess depreciation is called unabsorbed depreciation.
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