07 September 2009
As per sec. 115jb of the inocme tax act Unabsorbed depreciation or busioness loss can be deducted to arrive at the profit for the purpose of MAT. My qusetion is how to arrive at unabsorbed deprecation.
For example - A company stareted in 2006 made a loss of 1,00,000 which includes unabsorbed depreciation of Rs. 30,000 In 2007 the company made a profit of say Rs. 45,000 with out setting off previous years losses. Now what will be my unabsorbed deprecation balance for the year 2007 In short which should be set off first unabsorbed depreciation or business loss???
07 September 2009
For the purpose of book profit calculation u/s 115JB, the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account (for this purpose the loss shall not include depreciation) shall be allowed to be deducted from the Net Profit.
As per the facts given by you, unabsorbed depreciation is Rs.30000 and loss brought forward is Rs.70000 (Rs.100000-Rs.30000).
Therefore, while calculating book profit u/s 115JB for the year 2007 Rs.30000 (unabsorbed depreciation) shall be allowed to be deducted.
07 September 2009
I am sorry ,but kindly read my query completely. My qusetion s what will be the unabsorbed depreciation as per companies act as on 31.03.2007
CAclubindia
