Mat unabsorbed depreciation/loss concept

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Mohit (Querist)
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08 March 2016 Dear Sir/Madam,

I had a doubt in the MAT Concept. It says either Unabsorbed Loss or Unabsorbed Depreciation whichever is lower is to be reduced from Book Profits. Suppose I have total loss 60 where i have unabsorbed Dep say 35 and Unabsorbed Loss (excluding Dep) 25, i will deduct 25. Lets say next year my Net Profits are 40 after depreciation of say 15. This 2nd year, what will be my balance of Unabsorbed Loss and Unabsorbed Depreciation as per Books of Accounts that i can use for MAT purpose. Please can anyone show me an alternative example involving 2 years calculations that provides clarity to this concept. Thank you.

Regards

Mohit

Ankur Singhal

Ankur Singhal (Expert)
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08 March 2016 Dear for 2nd year your unabsorbed loss will be nil and unabsorbed depreciation will be 35.
And lower of two is allowed as deduction so nil will be allowed.

Mohit

Mohit (Querist)
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08 March 2016 Thank you sir for your reply. Had one more doubt. What about this situation where Current Year Book Profits is 10 before Unabsorbed Dep/Loss subtraction. Unabsorbed Loss say 25, Unabsorbed Dep say 35. So how much to reduce this year and also what's the treatment for next year assuming Book Profits are say 60 after including current year depreciation of say 20.

Will be really grateful if u could clear my doubt sir.

Thanks and Regards

Mohit

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Ankur Singhal

Ankur Singhal (Expert)
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08 March 2016 Dear
deduct Rs 10 from unabsorbed loss amd c/f Rs.15 as unabsorbed loss.
In next year Rs.15 or rs 35 which ever is less will be allowed as deduction.
i.e deduct rs.15.

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Mohit

Mohit (Querist)
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08 March 2016 Thank you so so much sir for clearing my doubt :)