02-09-2011, 06:52 PM
Dear,
Inadmissible deductions are those deductions, which may not be deducted from the total income to arrive at the taxable income.
Admissible deductions are those which are allowed to be deducted from total income to arrive at the taxable income.
Read section 21 of ITO 2001 to know about such deductions, list is provided therein.
Unadjusted loss/depreciation is that portion, which had not been set off in full in earlier years due to lesser amount of profits as compare to expenses/losses.
Calculate your taxable income in the following manner;
Net Profit-------------------------------------------XXXX
Add Accounting depreciation --------------------------XXX
Less Tax Depreciation -------------------------------(XXX)
Less finance charges on lease -----------------------(XXX)
Add Capital Gains ------------------------------------XXX
Net Taxable income ----------------------------------XXXX.
It should be ensured that amount of tax depreciation does not include depreciation on those assets, which are on finance lease.
Capital gains are assumed to be on owned assets, rather than leased asset.
Let me know if confusion still exists.
Best Regards,
Faisal.
