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Profit computation u/s 80jja

Tax queries 643 views 2 replies

CA Varsha Chaturvedi

Chartered Accountant

42 Points Posted on 27 May 2014

While computing deduction u/s 80JJA which profit is to be considered for amount of deduction - Profit as per Profit & Loss A/c or Adjusted profit after allow/disallow expenses as per IT Act?

Example-

Profit as per P/L = Rs. 10 lakhs

Dep as per Companies Act =Rs. 1 lakh

Dep as per IT Act = Rs. 1.20 lakhs

Disallowed exp u/s 43B (Cont. to PF) = Rs. 5 Lakhs

Disallowed exp (Int on tds/service tax) = Rs. 0.15 lakhs

Deduction u/s 80JJA will be Rs. 10 Lakhs or Rs. 14.95 laks?

Replies (2)

Rajagopalakrishnan R

PARTNER

1434 Points Posted on 27 May 2014

Normally in all deductions under chap VIA based on income of Business( as Opposed to Income of Assessee), the profit as per the P & L account has to be considered for deduction. This is so becos the deduction is for the commercial profits of the eligible business only. However, in you computation you should consider all disallowaces etc.

CA Varsha Chaturvedi

Chartered Accountant

42 Points Posted on 27 May 2014

But if we consider for deduction, profit after adding back disallowed expenses, then the very purpose of disallowance will be defeated becoz then it will not suffer tax. This is the major issue!