The depreciable asset (i.e Building) in the books of accounts of the XYZ company is being sold on 5 th April 2019 at Rs. 99,00,000/-. The WDV of the asset as on 31.03.2019 is Rs. 5,74,816.90/-. Although, the asset is a Long term capital asset but the gain is considered to be Short Term Capital Gain as per section 50 of the Income Tax Act 1961. Therefore the benefit of indexation is not available w.r.t the arising gain. Details for the purpose of computation of the tax liability: The tax liability after taking into consideration the Advance Tax Provisions amounts to Rs. 25,30,196/-. However the Company has unabsorbed depreciation of Rs. 15,79,709 /-. Can this benefit be taken for Advance tax calculation ? Further the MAT provisions are also applicable to the company.
Hi,
You can't utilise unabsorbed depreciation against the capital gain. Hence, it cant be deducted for advance tax calculation.
Please note that business losses of current year can be set off against any head of income. However, if such losses are carried forward, it can then be adjusted in future years against income under the head business and profession only.
Yes unabsorbed depreciation can be claimed against short term capital gain as its included in current years depreciation.
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Thank you.
Hello,
Unabsorbed depreciation can be set off against the STCG from depreciable assets and therefore advance tax calculation can be adjusted accordingly after setting off.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Dear Sir,
Yes, unabsorbed depreciation can be deducted for CG calculation.
