Calculation of u/s 115jb

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This query is : Resolved

Shankar Rao (Querist)
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03 October 2011 Dear all

for the year ending 31.03.2010 loss as per p&L a/c before deffered tax is Rs. 100000 and after deffered tax it is only 75000(Deffered tax Asset of Rs. 25,000 credited to P&L A/c)
For the year ending 31.03.2011 while calculating MAT whether I have to take Rs. 1,00,000 or Rs.75,000 as book loss brought farward from last year
It is depreciation loss only

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 October 2011 The loss of Rs. 1 lakh is totally on account of depreciation?

If that is the case, no deduction will be allowed.

This is so because Explanation 1 to ection 115JB provides that "brought forward business loss or unabsorbed depreciation, WHICHEVER IS LESS, shall be reduced from net profit for computing book profit."

It also provides that business loss does not include unabsorbed depreciation.

SO, if either, business loss or unabsorbed depreciation is NIL, no reduction will be allowed.

Accordingly, if the loss of Rs 1lakh is only unabsorbed depreciation, no reduction will be made from net profit.

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