Calculation of mat

Tax queries 728 views 2 replies

CA Smit Shah

B.Com M.Com C.A

759 Points Joined May 2009

DEAR FRIENDS

HOW TO CALCULATE UNABSORBED DEPRICIATION OR UNABSORBED BUSINESS LOSS FOR CALCULATION OF MAT?

YEAR WISE BREAK UP OF UNABSORBED DEPRICIATION OR UNABSORBED BUSINESS WILL BE CONSIDERED OR IT WILL BE CALCULATED IN TOTALITY.

I AM ASKING THIS AS I FIND DIFFERENT METHOD IN TWO REFERENCE BOOK.

I AM GIVING EXAMPLE TELL ME WHICH ONE IS RIGHT?

Treatment -1
P.Y.	Business Loss	Depriciation	Profit/(Loss) for the year	Eligible for MAT Deduction
2008-09	47004	-19645	27359	nil
2009-10	-89424	-88997	-178421	88997
2010-11	171544	-146073	25471	nil

	Amount Eligible for Deduction			88997


Treatment-2
P.Y.	Business Loss/Profit	Depriciation	Profit/(Loss) for the year	Eligible for MAT Deduction
				Unab. Dep	Unab. Loss
2008	47004	-19645	27359	0	0
2009	-89424	-88997	-178421	-88997	-62065
2010	171544	-146073	25471	-88997	-36594
				w.e.is less
	Amount Eligible for Deduction			36594

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

You will need to conider the deprn & business loss on cumulative basis & take the deduction accordingly.

Tehsinkhan Pathan

CA CMA DISA(ICAI) B.COM

3956 Points Joined November 2010

As per my opinion looking to the language of clause , approach of Girish Ahuja (Bharat Book) is most preferable.........

1. You should consider year wise unabsorbed depreciation or unabsorbed loss w.e. is less

2. for next year before applying above step, you should aggregate i. e. opg balance of loss(to the extent not set off previous year) + current year loss