What is unabsorbed depreciation ? how its treatment different
in taxation vis-a-accounting?
Answer / bhupender janmejai
Take a simple example -
In P/L a/c you have G.P./ Income etc. on credit side as Rs.
50,000. Depreciation during the year is say 10,000. Now
you will simply debit the depreciation and your net profit
will become 40,000 chargeable to tax.
However if the credit side remains same as Rs. 50,000 but
the depreciation is 60,000 then what will happen?
In accounting terms it will simply show a loss of 10,000 to
the firm. However in taxation terms this 10,000 will be
known as unabsorbed depreciation.
Now the assessee can carry forward this 10,000 to next years
and can setoff it against future profits. For details you
should read SET-OFF & CARRY FORWARD chapters along with
topic of depreciation in b&p
Is This Answer Correct ? | 13 Yes | 1 No |
What are the two most important Factor that should be kept in mind when there is a buy back of shares in companies as per indian companies act,1956
how to adding entries in tally complete new company
Scheme is given by a company to his distributors on sale of goods, what is the treatment of this scheme distributors hand Direct income or indirect income
what is the relation of accounting subject with other subjects like economics commerce and statistics?
Our company is in manufacturing stage and we had paid advance payment to several suppliers for some construction purposes. As manufacturing stage I want to treat it as Capital work in progress.So kindly advise how can we pass the entries for the same.
1 Answers Reflective Aluminium Glass,
WHAT IS THE DIFFERENCE BETWEEN THE BENEFITS OF DIRECT EXPENSE AND INDIRECT EXPENSE
how will rectify the error in trial balance.
What is an ea in accounting?
What is a wash rate in foreign exchange accounting?
What are the probable interviwe questions in SBI clerical interview ? I am having my interview on 30th april.
0 Answers GE Healthcare, State Bank Of India SBI, Wipro,
what is the journal entry for accumulated depreciation?
tell me the best way to minimize the cost of a company?