UNABSORBED DEPRECIATION

can u tell under which section it was written c/f dep . for unlimited years

Up to assessment year 1996-97, unabsorbed depreciation was considered as the depreciation allowance of the succeeding year(s) and, thus, had an indefinite life for set-off against any head of income.

From assessment year 1997-98 to 2001-02 ('intervening period'), the law was amended and unabsorbed depreciation of a particular year was permitted to be carried forward for a period of eight years only, for a set-off against profits and gains of business or profession.

The law existing prior to the intervening period was reinstated with effect from assessment year 2002-03.

Unabsorbed depreciation= Total Business Loss as per computation of income - Depreciation as per income tax 

1-Unabsorbed depreciation can be carry forward infinity year till end of business 

2-Treatment for unabsorbed depreciation:

1. Unabsorbed depreciation of current previous year shall be added to following previous year’s depreciation.
2. It can be set-off against any head of income.
3. It can be carried forward to any no. of years until it is fully set-off.
4. In case of carry forward of business loss or speculation loss, the set-off shall be done after setting off current depreciation and such loss.

3. Continuity of business: Continuity of business is not relevant for set-off and carry forward.

4. Carry forward of depreciation: Depreciation can be carried forward by the same