Inter head adjustment

Hi Deepika,

According to section 32(2),

If the depreciation allowance is not fully deductible under the head "Profit and gains from business or profession" because of absence or inadequacy of profits then it is deductible from income chargeable under other heads of income for the SAME ASSESSMENT YEAR (EXCEPT INCOME CHARGEABLE UNDER THE HAED " SALARIES ")

Thus the section clearly states that unabsorbed depreciation cannot be set off against salaries.

If the depreciation is still unabsorbed,it can be carried forward to the subsequent assessment years. (CAN BE CARRIED FORWARD FOR INDEFINITE PERIOD)

In the case of set off ,following order of priority is followed in subsequent years:

a.Cuurent depreciation

b.Brought forward business loss

c.Unabssorbed depreciation

Regards,

Fatema

Hi,

If you want the logical reasoning as to why one cannot set-off any income against salary income is because salary income can never be negative. (You can never get negative salary, right?) That is why no set-off is applicable against SALARY INCOME.