Dear Friends,
Some members in the forum raised a query that Unabsorbed dep cannot be set off against salary. But, this comment is to explain my view that it can be set off against salary. Business Loss cannot be set off against salary income (As per Section 71(2A)). However, unaborbed dep is covered under section 32(2). Nowhere in that section, it is mentioned that unabsorbed dep cannot be set off against salary. I have reproduced the following lines from the I.T.Act, 1961,
2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.
In the above lines, link has been given to section 72(2) and 73(3). In those sections also, nothing is specified regarding set-off of unabsorbed dep against salary. had there been an intention to disallow set-off of unabsorbed dep against salary, there would have been an explicit point regarding the same in Section32(2)(As in the case of Sec.72(2A).
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