it 's debatable issue whether we can setoff unabsorbed depreciation with salary or not. It's no where mentioned that Unabsorbed depreciation can't be setoff with salary insome. If any one read it otherwise please inform
IS UNABSORBED DEPRRECIATION CAN BE SETOFF FROM SALARY OR NOT
Page no : 4
CA Balram Sharma
(CA)
(839 Points)
Replied 10 November 2009
DEPRECIATION CANN'T BE SETOFF FROM SALARY
CA Devanshi Gandhi (Ajani)
(FCA DISA Mcom CIFRS & LLB)
(9060 Points)
Replied 17 November 2009
|
Sr.No. |
Section
|
Types of Loss
|
Set Off against Income |
Can be carried |
|
|
In same Assessment Year |
In subsequent Assessment Year |
||||
|
1 |
71/72 |
Business or Profession(other than speculation or depreciation) |
Business Income Head or any other head (other than salaries) |
Business Income(Note 1) |
8 years |
|
2 |
32(2) |
Unabsorbed Depreciation |
Business Income or any other head |
Business Income or any other head |
Indefinitely |
manjari
(Article )
(56 Points)
Replied 25 December 2009
no way. it can be c/f to F/Y but can not set off from salary income
manish
(Article Assitant)
(358 Points)
Replied 13 February 2010
unabsorbed dep cannot be set off against salary.
manish
(Article Assitant)
(358 Points)
Replied 15 February 2010
Unabsorbed dep can be carried forward to the subsequent assessment year(s). No time limit is fixed for the purpose of carrying forward of unabsorbed dep, it can be set off against any income chargeable under the head "PGBP" or under any other head (not being income chargeable under the head Salaries"). In the matter of set off the following order of priority is followed in the subsequent year(s).
1. Current dep
2. Brought forward Business Loss.
3. Unabsorbed Depreciation.
regards
Manish
Sanjay
(CA Final n CS Final)
(324 Points)
Replied 12 March 2010
| Originally posted by : kabirsen | ||
 |
plzz....i,m again saying the ammendment made in fa act 2004 ...dissallowed set off salary with pgbp loss.. pgbp loss is always diff from unabsorbed dep...as they are governed by different dections... sec 32 doesnt deny benefit of such set off i wud recomend mischief rule of interpretation...to interpret the amendment which came abt in 2004 the ammendment came ...bcoz ppl showed fictitous pgbp loss to set off salary and claim refund of tds...to plug the lacuna the amendment was introduced....this manipulation was tough with ubsorbed dep as an assessee needed actual fixed assets to claim dep.... b4 such ammendment both pgbp loss and unabsorbed dep cud be set off with salary w/o any limit the amendment came only for denying set off salary income with pgbp loss... |
 |
I M OF FIRM BELIEF THAT UNABSORBED DEPRECIATION CAN BE SET OFF FROM SALARY BECOZ IT IS GOVERNED BY SEC.32 AND NOT SEC.72
Rajat Singhal CA,CS,CFA
(Senior Manager (F&A))
(254 Points)
Replied 12 March 2010
Carry forward provisions for business losses are covered by section 72 while the setoff and carry forward provisions for unabsorbed depreciation are covered by subsection 2 of section 32.
So, i think unabsorbed dep can be setoff against the salary income.
My question is following :-
Section 80
SUBMISSION OF RETURN FOR LOSSES.
Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or Sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A.
Whether Unabsorbed dep can be carry forward if section 80 is not complied with ?
Thanks & Regards
Rajat
Sanjay
(CA Final n CS Final)
(324 Points)
Replied 12 March 2010
| Originally posted by : CA, CS Rajat Singhal | ||
|
|
Carry forward provisions for business losses are covered by section 72 while the setoff and carry forward provisions for unabsorbed depreciation are covered by subsection 2 of section 32. So, i think unabsorbed dep can be setoff against the salary income. My question is following :- Section 80 SUBMISSION OF RETURN FOR LOSSES. Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or Sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A. Whether Unabsorbed dep can be carry forward if section 80 is not complied with ? Thanks & Regards Rajat |
|
Unabsorbed depreciation can be c/f and Set off even if Return is not filed.Refer Haryana Hotels Ltd(2005) case law
Rajat Singhal CA,CS,CFA
(Senior Manager (F&A))
(254 Points)
Replied 13 March 2010
Yes sanjay,
I had stated this question so that it can be poroved that business losses are totally different from unabsorbed depreciation.
According to section 80 Business losses can be carry forward only if return is file on due date, but unabsorbed dep can be carry forward even if return is not filed on due date.
In the same way according to section 72 business losses cannot be setoff against salary income and section 32 specifically says that unabsorbed dep can be setoff against any income.
Regards
Rajat
Max Payne
(employed)
(2574 Points)
Replied 13 March 2010
Rajat sir,
There is a disctinction between unabsorbed dep and business loss, that can be seen by sec 76 also , which restricts the set ofo business loss to years, but unabsorbed depreciation is infinitely carried forward..
On the other hand, in the income tax return , there is no provision to set off unabsorbed depreciation against salary. Its not fair, this matter wont even be challenged anywhere. So as of now, practically u cant set it off.
C.Balaji
(Learner)
(1867 Points)
Replied 13 March 2010
We have discussed this topic many times and got different reactions / opinions / views on this topic......I also agree with G.K. Anna......Unabsorbed depn. cant be set off against salary....
i.e. Ordinaryily Resident Evil..........
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