depreciation and salary set off
This query is : Resolved
02 October 2010
Dear friends,
Is it allowed to claim set off of unabsorbed depreciation against Salary income? Income tax Act clearly distinguish unabsorbed Depre and business loss. The Act doesnt permit to set off of business loss against Salary, but does not specifically disallows in the case of unabsorbed depre..
Can any1 help me out in ths matter..?
Thanx n Advance..
Is it allowed to claim set off of unabsorbed depreciation against Salary income? Income tax Act clearly distinguish unabsorbed Depre and business loss. The Act doesnt permit to set off of business loss against Salary, but does not specifically disallows in the case of unabsorbed depre..
Can any1 help me out in ths matter..?
Thanx n Advance..
02 October 2010
i think yes..
coz..as per sec 32 unabsorbed depreciation can set off against "ANY" other head of income & there is no specific disallowance against salary.
coz..as per sec 32 unabsorbed depreciation can set off against "ANY" other head of income & there is no specific disallowance against salary.
Message likes :
1 times
02 October 2010
Discussed in depth in these links
https://www.caclubindia.com/forum/set-off-against-salary-62177.asp
and
https://www.caclubindia.com/forum/is-unabsorbed-deprreciation-can-be-setoff-from-salary-or-not-53900.asp
https://www.caclubindia.com/forum/set-off-against-salary-62177.asp
and
https://www.caclubindia.com/forum/is-unabsorbed-deprreciation-can-be-setoff-from-salary-or-not-53900.asp
Message likes :
1 times
03 October 2010
I always wish NOT to give an incorrect view... & so went thru the links pasted above & saw a lot of discussions done with different / opinions / views on this topic......
one conceptual point i came across was that,
earlier set off of PGBP loss against salary was allowed till an amendment was brought about by the FA 2004 which dissallowed set off salary with pgbp loss..
b4 such ammendment both pgbp loss and unabsorbed dep cud be set off with salary w/o any limit
the ammendment came bcoz... ppl showed fictitous pgbp loss to set off salary and claim refund of tds...& to plug the lacuna the amendment was introduced....
now a participant in the discussions was of the view that
"this manipulation was however tough with ubsorbed dep as an assessee needed actual fixed assets to claim dep and the amendment came only for denying set off salary income with pgbp loss...pgbp loss is always diff from unabsorbed dep...as they are governed by different dections...& sec 32 doesnt deny benefit of such set off"
Also the actual lines of FA 2004 are....
"Sub-Section (2A) has been inserted in Section 71 to prohibit set off of
business loss against income assessable under the head ‘Salaries’."
CONCLUSION at last:
The AMENDMENT was brought in SEC 71 & NOT 32(2)... THUS SET OFF OF UNABSORBED DEPRECIATION u/s 32(2) AGAINST IS CONTINUED.
one conceptual point i came across was that,
earlier set off of PGBP loss against salary was allowed till an amendment was brought about by the FA 2004 which dissallowed set off salary with pgbp loss..
b4 such ammendment both pgbp loss and unabsorbed dep cud be set off with salary w/o any limit
the ammendment came bcoz... ppl showed fictitous pgbp loss to set off salary and claim refund of tds...& to plug the lacuna the amendment was introduced....
now a participant in the discussions was of the view that
"this manipulation was however tough with ubsorbed dep as an assessee needed actual fixed assets to claim dep and the amendment came only for denying set off salary income with pgbp loss...pgbp loss is always diff from unabsorbed dep...as they are governed by different dections...& sec 32 doesnt deny benefit of such set off"
Also the actual lines of FA 2004 are....
"Sub-Section (2A) has been inserted in Section 71 to prohibit set off of
business loss against income assessable under the head ‘Salaries’."
CONCLUSION at last:
The AMENDMENT was brought in SEC 71 & NOT 32(2)... THUS SET OFF OF UNABSORBED DEPRECIATION u/s 32(2) AGAINST IS CONTINUED.
03 October 2010
Thank u very much Adithya and Punit for ur valid contributions.. excellent..
03 October 2010
Thank u very much Adithya and Punit for ur valid contributions.. excellent..
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Capital gain from sale of house property
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- LC charges in relation to Asset purchased should be Capitalised ?
- Transporter Declaration form
- Copyright software
- Regarding TDS Applicability For Director Remuneration
- Before GSTAT- APL-02 Vs APL-04
- Annual return in Gst
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
