Hi Devanshi ,

Can you tell me under which section it cover, that unabsorbed depreciation can be set off from salary,

Unabsorbed depreciation is not a business loss and not governed by section 71. It is governed by section 32. In my opinion it can be set off against salary.

Dear Balram,

      I give due respect to the points given by my friends above. Unabsorbed dep. is not a business loss covered under Sec.71(2A). It is covered under sec.32(2).Nowhere in sec.32(2), it is mentioned that unabsorbed dep. cannot be setoff against salary. Hence unabsorbed dep. can be set off against salaries

Unabsorbed Depreciation can be set- off against salary income under section 32(2) because no where under section 32(2) restrict to setting off of unabsorbed depreciation against salary income.

I think budy you don't read clearly  Section 32(2)

Please read the exact law language  don't read from any text book or author book.

Further can any body tell me whether current year depreciatioN can be setoff or not.?

You will find your answer.

"[Section 32(2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year⁹, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.]"

As per setion clearly said that if the allowance is not available that should be added in next year deprecation, it mean't that depreciation become current year deprecation and can be setoff any number of year, futher section provide that depreciation can setoff from profit or gain , further when you add this in current year deprecation it will become the current year loss and that cann't be setoff from salary ,

So final conclusion is that deprecation cann't be setoff under the head salary,

If still there is any double most welcome to call.

Dear Balram,

      As per ur point, do you mean to say unabsorbed dep has to only be carried forward and set off if profits are insufficient.In section 32(2), they have not disalllowed unabsorbed dep. from being set off against Salaries. they have made link to72(2) and 73(3). In those sections also, nothing has been specified regarding the disallowance of set off of unabsorbed dep against salaries. Had there been an intention to disallow unabsorbed dp there would have been an explicit statement in 32(2), as in section 71(2A)