kanhaiya (Article Assistant) (33 Points)
24 September 2010Hi
One of the company has two units one is 100% EOI & other is normal unit (Both in software business).
Now the question is that The 100% EOI unit is eligible for exemptions u/s 10A.
what can i do if the normal unit incurres losses.is the losses of normal unit forwarded to next period or it will be set off against the profits of export unit.
is exemption is given on the income after setting of losses of normal unit.
Narayanan
(Chartered Accountant)
(189 Points)
Replied 24 September 2010
find the total profit of the company... then divide the profit in the ratio of turnover... the export portion of profit will be exempt... the non-export will be taxable.
In case you have an overall loss, then you get to carry forward ONLY the non-export loss.
This is irrespective of whether the individual units earn profit or loss in the year.
Narayanan
(Chartered Accountant)
(189 Points)
Replied 24 September 2010
and in case of an overall loss, the non-export loss can be set-off from future non-export profit ONLY. You cannot deduct it from the export profit (which is anyway exempt- so why do u want to do it that way?)
Member
(Management)
(325 Points)
Replied 26 September 2010
For EOU units, you are supposed to maintain seperate books and so the question of apportioning the profit does not arise.
CAclubindia
