Brought Forward Loss as per books of accounts

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What do we mean when we say 'brought forward loss or unabsorbed depreciation as per books of account' ?

 

Is it the same thing and amount as we calculate in the Income Tax reutrn computations?

For example- if the loss is more than 8 years it is not carried forward  for Income Tax purposes.... will the same treatment be given in the books of account as well?

 

this is in relation to MAT calculation

Replies (3)

Irrespective of Accounts or Tax view, MAT can be carried forward for the period of 10 years. In the 11th year if still any unabsobed amount is there, then you will have to write off it fully in the 11th year from your books...

Mr. Nikhil

Business loss in accounts and unabsorbed depreciation in accounts both can be carried forward and set off for unlimited period. 

For calculation of MAT whichever is lower is allowed as deduction.

But if for many year this loss is ever increasing and not able to set off then company will become sick and MAT is not payable.

As far as MAT credit is concerned if not set off till 10th year, then in 11th year it has to be write it off.

Income tax

72 : can be carried forward for 8 years

32(2) : carried forward for unlimited period.

thanks

Thank you Mr Kaushal for solving the query.


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