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115JB CALCULATION

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This query is : Resolved

CA skmnair (Querist)

12 June 2008 COMPANY STARTED 2 YEARS BACK,FROM 1st YEAR DEPRECIATION CARRY FORWARD IS 100000/- BROUGHT FORWARD BUSINESS LOSS-NIL. 2nd YEAR BUSINESS LOSS 200000/- ACCUMULATED DEPRECIATION LOSS 180000/- MY QUESTION IS WHETHER CURRENT YEAR WHILE APPLYING MAT ACCUMULATED LOSS OR DEPRECIATION BROUGHT FORWARD FROM PREVIOUS YEARS WHICH EVER LESS CAN BE DEDUCT TO CALCULATE BOOK PROFIT OR WHETHER WE NEED TO CONSIDER EACH YEAR SEPERATLY(PREVIOUS YEARS MAT NOT FOLLOWED)

C.A Rohit Gambhir

C.A Rohit Gambhir (Expert)

12 June 2008 Section 115 JB provides for deduction from net profit as follows a:

Brought Forward Business Loss or Unabsorbed Depreciation whichever is less

You can follow this even if MAT has not been followed in the previous year.

But in the given case since Business Loss is Nil and Unabsorbed Depreciation is 100000/= in PY nothing will be allowed to be deducted in the current year while calculating book profits.

However you can avail deduction of 1.80 Lacs in the 3rd year for unabsorbed depreciation

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