Carry forward losses
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
31 July 2012
Dear,
In our company, we have losses (as per Companies Act)of more than 50% of our net worth and provision of SICA is applicable for information to BIFR. (Carry forward losses as per I.Tax is there)
Now the management is thinking to go for reduction of capital against the losses to avoid SICA provisions.
Query: If we opt for reduction of capital as per Companies Act 1956 and adjust losses, can we continue carry forward losses as per I.Tax Act and set off against future profits if any.
In our company, we have losses (as per Companies Act)of more than 50% of our net worth and provision of SICA is applicable for information to BIFR. (Carry forward losses as per I.Tax is there)
Now the management is thinking to go for reduction of capital against the losses to avoid SICA provisions.
Query: If we opt for reduction of capital as per Companies Act 1956 and adjust losses, can we continue carry forward losses as per I.Tax Act and set off against future profits if any.
Amol S Joglekar
(Expert)
31 July 2012
Yes. The scheme is required to be approved.
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