UNABSORBED DEPRECIATION

Page no : 2

alpesh (PTRN) (22 Points)
Replied 25 January 2011

can u tell under which section it was written c/f dep . for unlimited years

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 27 January 2011

Up to assessment year 1996-97, unabsorbed depreciation was considered as the depreciation allowance of the succeeding year(s) and, thus, had an indefinite life for set-off against any head of income.

From assessment year 1997-98 to 2001-02 ('intervening period'), the law was amended and unabsorbed depreciation of a particular year was permitted to be carried forward for a period of eight years only, for a set-off against profits and gains of business or profession.

The law existing prior to the intervening period was reinstated with effect from assessment year 2002-03.

Vikash Shah (Real Estate Developer) (47 Points)
Replied 11 August 2011

hello

please help me in this little problem

Profit & loss account

purchase 1000 sale 1200

expenses 300

capital loss 200

speculative business loss 400

Book Depreciation 600

Net Loss 1300

Additional Info:

Dep as per IT 800

this is my solution:-

1. PGBP

profit from p/l (1300)

+book dep 600

+sp. business loss 400

+capital loss 200

-dep as per IT (800)

Non sp Business loss 900......to be c/f

Speculative business loss 400....to be c/f

2.C.G (200)......to be c/f

i am confused about unabsorbed depreciation. where it is?? how much to be c/f??

CA DURGESH PAL (articls) (51 Points)
Replied 20 April 2018

Unabsorbed depreciation= Total Business Loss as per computation of income - Depreciation as per income tax

1-Unabsorbed depreciation can be carry forward infinity year till end of business

2-Treatment for unabsorbed depreciation:

Unabsorbed depreciation of current previous year shall be added to following previous year’s depreciation.
It can be set-off against any head of income.
It can be carried forward to any no. of years until it is fully set-off.
In case of carry forward of business loss or speculation loss, the set-off shall be done after setting off current depreciation and such loss.

3. Continuity of business: Continuity of business is not relevant for set-off and carry forward.

4. Carry forward of depreciation: Depreciation can be carried forward by the same