Set off Against Salary

hello shafaf earlier it ways allowable to setoff dep agnst salary but later i.e after amendment no setoff of dep can be made agnst salary

agree with all except manish.............

ya...............unabsorbed dep cannot be setoff from salary head................its true.................

agree with all except manish.............

ya...............unabsorbed dep cannot be setoff from salary head................its true.................

 refer this link...... a huge discussion.............on this topic.....

 /forum/message_display.asp?group_id=53900

unabsorb depre. cannot be setoff against salary income

Legal perspective:

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Section 32(2) says that where the depreciation could not be set off against the profits and gains chargeable to tax, then it could not be set off against income under other heads. If the incomes under other heads are insufficient, then the ‘unabsorbed depreciation’ has to be carried forward to subsequent year for set off.

When it is carried forward it becomes ‘current’ depreciation of that year and hence eligible for set off against business income and also against any other head of income. Even depreciation of discontinued business could be set off against continued business income and other incomes.

However, whether it could be set off against salary income is somewhat dicey in view of in Section 71(2A) though the law prevents only the set off of business loss against salary income and not depreciation.

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as per section 32(2) unabsorbed depreciation can be st off from any head of income exept casual income (section 58(4) ). so anabsorbed deprecition is set off against income under the head salary.

Can not be set off under the head salary income

it is a basic fact that if you are working as an employee and are earning salary, then it may not be possible for you to do business and hence income tax treats income earned from employment and income earned from business separately. you will appreciate that all the other heads of income are such that we can earn such income while conducting business or earning salary, however salary and business income are such which are assumed to be performed one at a time. hence all the loss arising from business is not allowed to be set off from salary income. which means that depreciation loss would also not be allowed to be set off against salary income.

i hope you understand the relation

Originally posted by : Dayavanti Khilolani
	it is a basic fact that if you are working as an employee and are earning salary, then it may not be possible for you to do business and hence income tax treats income earned from employment and income earned from business separately. you will appreciate that all the other heads of income are such that we can earn such income while conducting business or earning salary, however salary and business income are such which are assumed to be performed one at a time. hence all the loss arising from business is not allowed to be set off from salary income. which means that depreciation loss would also not be allowed to be set off against salary income.   i hope you understand the relation

mam i agree with u dat business income cannot b setoff against salary income.......bt i dnt agree wid u here dat a salaried employee cannot be a businessman......

as far as i knw...i have seen many salaried persons working in private companies or other agencies running a side business......my brother too is working as a lecturer in some college n is running a side business of computers........

Ms Dayavanti khilolani, If a person is employed in any organisation as a salaried employee and also he is an insurance agent, commission received from the insurance company is chargeable to tax under which head ?? Please reply

please see sections 72A, 72AA, 72AB - Loss from business is certainly treated on a footing different from Unabsorbed depreciation. There is nothing in the act to prohibit the set off of unbsorbed depreciation against salary.

Originally posted by : Satish
	Ms Dayavanti khilolani, If a person is employed in any organisation as a salaried employee and also he is an insurance agent, commission received from the insurance company is chargeable to tax under which head ?? Please reply

Invariably PGBP. see the definition of business. Its an inclusive one.

Its not possible  setoff unabsorbed depreciation against Salary income

Hello Guys...

Unabsorbed depreciation cannot be set off against salary as Unabsorbed depreciation is considered as Biz loss...... Biz loss cannot be adjusted against salary......