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Discussion > Income Tax >

MAT - Unabsorbed Depreciation

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PBN-KOL-PUNE-CHENNAI ("A PHILOSOPHER")

[ Scorecard : 25430]
Posted On 29 May 2010 at 13:36 Report Abuse

Friends

A Pvt. Ltd. Co. Which is Paying tax Under Section 115JB.

 

In That Company In Last Year 

 

Year 2009-10 - Income Book Profit  - 500000

 

- There Was Business Loss Carried Forward of Past Years Rs. - 200000

 

- Unabsorbed Depreciation Carried Forward As Per Schedule XIV of Companies Act.of Past Years - 300000

 

Then What is Computation of Tax Under MAT Provision.

 

Book Profit - 5 Lacs

Less : Business Loss - 2 Lacs

Net Book Profit - 3 Lacs

 

Then Weather Tax is To Be Paid @ 15% on 3 Lacs

 

or Weather Unabsorbed Depreciation Also Can We Set Off.

 

Actually My Question is Weather Unabsorbed Depreciation As Per Companies Act Can Be Set

Off Under MAT Book Profit or Only Business Loss is Adjusted.

 

 


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Aditya Maheshwari
CA in Practice

[ Scorecard : 34863]
Posted On 29 May 2010 at 15:13

Lower of unabsorbed depreciation and book loss is allowed as a deduction for the purpose of calculating MAT.





Jagdish Bhalia
Practicing CA

[ Scorecard : 443]
Posted On 29 May 2010 at 15:21

Unabsorbed Depreciation as per books and

Broughtforward business loss as per books , which ever is less will be deduct from the adjusted book profit.

In your case you have already adjusted business loss from the book profit. Now you cannot adjust Unabsorbed depreciation from the book profit.

MAT will be calculated on Rs. 3 Lakhs.




CA AYUSH AGRAWAL
PBN-KOL-PUNE-CHENNAI ("A PHILOSOPHER")

[ Scorecard : 25430]
Posted On 29 May 2010 at 16:07

Originally posted by : Jagdish Bhalia

Unabsorbed Depreciation as per books and

Broughtforward business loss as per books , which ever is less will be deduct from the adjusted book profit.

In your case you have already adjusted business loss from the book profit. Now you cannot adjust Unabsorbed depreciation from the book profit.

MAT will be calculated on Rs. 3 Lakhs.

Then Should I Carry Forward Unabsorbed Depreciation For Subsequent Years to Set Off.

Or It Become Irrelevant to Setoff Now.




Jagdish Bhalia
Practicing CA

[ Scorecard : 443]
Posted On 29 May 2010 at 17:15

You can carry forward the business loss for MAT purpose only.

Because in Income tax Brought forward business loss and unabsorbed depreciation will be differ from books. While calculating the total Income as per income tax act, unabosbed depreciation as per Income tax act will be considered.

I think ur doubt is clear.




Ramil (CA,L.L.B.)
Taxation

[ Scorecard : 147]
Posted On 29 May 2010 at 18:04

dear ayush , 

as per sec 115jb of income tax act,

Lower of (as per company's book)

a)Business loss or

b)unabsorbed depreciation 

shall be deducted .

So far as ur query relates to carry forward of unabsorbed depre. as per books  , so it can be carried fo

forward and next year if co. pays mat then again lower concept be applicable. 

In case of mat we are nowhere concerned with income tax sections becoz  sec115JB is a self 

contained section. mat tax has to be calculated with its governing provs.

IF any further query , u may ask ....

bye  




pramod kumar singh
student

[ Scorecard : 27]
Posted On 17 June 2010 at 11:52

in case after adjustment of B/F unabsored  depreciation or business  loss position is Book loss then company is liable to pay MAT  Plz  Help. 




Aditya Maheshwari
CA in Practice

[ Scorecard : 34863]
Posted On 17 June 2010 at 12:32

If book profits calculated as per section 115JB is also a loss then MAT will not be payable.




IWILL
Forgiver

[ Scorecard : 54]
Posted On 06 July 2010 at 09:33

Is MAT -Minimum Alternate Tax applicable to the POWER generation companies..i.e.Sec.115JB




CA Sachin D Jain
FCA, CS, DISA (ICAI)

[ Scorecard : 916]
Posted On 12 September 2011 at 00:13

Dear All,


One company has already adjusted lesser of unabsorbed depreciation and business loss as per books under MAT, last year i.e. FY 09-10.


But still, there are carried forward losses in the form of Debit balance of profit and loss account. Now, in FY 10-11,

1. Should the company again make backward calculation to check the figure of lower of unabsorbed depreciation and business loss, to claim lesser of the two from current year calculation of MAT.

Or 2. No deduction on account of lower of unabsorbed depreciation and loss will be allowed in FY 10-11, as the Company has already taken the benefit in FY 09-10.

Please clarify.



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