Unabsorbed Depreciation

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Devendra

Devendra (Querist)
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13 October 2010 How does unabsorbed depreciation arise? Give me an example.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 October 2010 Unabsorbed depreciation - Its the amount of depreciation which the assessee could not claim as expenditure in his profit and loss account due to lack of sufficient credit in the credit side of p&l account or other expenses.. such loss in p&l account due to the excess depreciation is called unabsorbed depreciation. such depreciation can be set off against any head of income in the current year and the balance not set off can be carried forward for any number of years.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 October 2010 For eg. 1) depreciation claimed under IT Act is rs 5,00,000/-, and total business loss is Rs 10,00,000/-. Now in this case unabsorbed depreciation is Rs 5,00,000/-( Rs 10 lakhs - Rs 5 lakhs). 2) depreciation claimed under IT Act is rs 5,00,000/-, and total business loss is Rs 2,00,000/-. Now in this case unabsorbed depreciation is Rs 2,00,000/-

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