CAF-2 · Chapter 11 · Question 3 of 15
ABC Ltd has an unabsorbed tax depreciation loss brought forward from the previous year amounting to Rs. 20 million. Its current year's business income (before this adjustment) is Rs. 30 million. Assuming its taxable income exceeds Rs. 10 million, what amount of the unabsorbed depreciation can be set off this year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Rs. 15 million
Explanation
Where the taxable income is Rs. 10 million or more, unabsorbed depreciation/amortization loss can only be set off against 50% of the person's balance income chargeable under the head "Income from Business" for the year. Thus, 50% of 30 million = Rs. 15 million.
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