Section 115JB: Book Profit

[Bijay Shrestha]

Dear Friends,

Under Section 115JB of IT Act 1961, in order to Compute Book Profit, the following is to be reduced from Profit/Loss as per Companies Act 2013:

(i) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

Explanation.-For the purposes of this clause,- (a) the loss shall not include depreciation;

(b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation is nil

Now My queries are:

1. What is the Loss Brought Forward here ? Is it as per Sch III of Companies Act 2013 OR as per Loss computed as per 115JB (i.e. Book Loss) ?

For Example: Suppose 1st Year, Loss as per Sch III is ₹ 1,00,000/- and Book Loss as per 115JB is ₹ 75,000/- (because of some additions and Deletions) Now in 2nd Year, for the purpose of 'Loss Brought Forward' under section 115JB, Which amount is to be taken : ₹ 1,00,000/- or ₹ 75,000/-. ??

2. For Unabsorbed Depreciation as mentioned above, Depreciation is to be computed as per Companies Act OR Income Tax Act ?

3. From following example, please advise Amount to be taken for loss brought forward or unabsorbed depreciation for Book Profit Computation u/s 115JB for FY 2015-16:

Financial Year	Profit/(Loss) as per Sch III (before Depreciation)	Depreciation as per Companies Act	Total Profit/(Loss) as per Sch III
2011-12	(50,000)	25,000	(75,000)
2012-13	80,000	1,00,000	(20,000)
2013-14	60,000	40,000	20,000
2014-15	(75,000)	35,000	(1,10,000)
Total	15,000	2,00,000	(1,85,000)

Please kindly suggest.

AI Summary

Clarification Sought on Computing Book Profit Under Section 115JB: Loss and Depreciation Calculation Methods Disputed A forum participant is seeking clarification on computing book profit under Section 115JB of the Income Tax Act, 1961. They inquire whether 'loss brought forward' should be based on Schedule III of the Companies Act, 2013, or as per the book loss computed under Section 115JB. They provide an example with differing loss amounts and ask which should be used for the next financial year. Additionally, they question whether unabsorbed depreciation should be calculated according to the Companies Act or the Income Tax Act. They request guidance on determining the correct amounts for loss brought forward or unabsorbed depreciation for the fiscal year 2015-16.