The net result of the business carried on to a branch of US based foreign company in India for the year ended 31.03.2024 was a loss of 28 lakhs…

Computation of income to be declared by the branch in its return of income for A.Y.2024-25 Particulars ₹ Loss of the branch (28,00,000) Add: Short-term capital loss [allowed to be set-off only against capital gains] 1,50,000 Expenditure on Voluntary Retirement Scheme [Only 1/5 is allowable as deduction. Thus, 4/5 th will be added back] 9,60,000 Brought forward speculative business loss [Allowed to be set-off only against speculative business] 17,00,000 Head office expenditure debited to profit and loss 1,65,00,000 1,93,10,000 1,65,10,000 Less: Head office expenses allowable u/s 44C [Refer note below] 10,60,500 Income to be declared by the branch 1,54,49,500 Note - Computation of Head Office expenses allowable u/s 44C Head office expenses allowable u/s 44C = 10,60,500 Being the lower of - (i) 5% of 2,12,10,000 (adjusted total income) = 10,60,500 (ii) Actual Head Office expenses allocated to the branch= 1,65,00,000 Computation of Adjusted Total Income Particulars Particulars ₹ Loss of the branch (28,00,000) Add: Current year depreciation NIL Unabsorbed depreciation 18,00,000 Short-term capital loss 1,50,000 Expenditure on Voluntary Retirement Scheme [Only 1/5 is allowable as deduction. Thus, 4/5 th will be added back] 9,60,000 Brought forward speculative business loss 17,00,000 Deductions under Chapter VI-A 29,00,000 Head office expenditure debited to profit and loss 1,65,00,000 2,40,10,000 Adjusted total income 2,12,10,000 Note – Depreciation for the current financial year is not required to be added back for computing adjusted total income.