Regarding Carry forward of business loss

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Yes, Clause 32 of the Tax Audit Report (Form 3CD) specifically addresses the reporting of business losses that can be carried forward to future tax years. This clause requires tax auditors to detail brought forward losses and depreciation, and crucially, to confirm that the current year's losses are eligible for carry forward. It also verifies the assessee's compliance with provisions like timely return filing, which is essential for claiming these losses in subsequent assessments.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

22 November 2025 there is any clause in tax audit report to report current year loss brought forward to next year?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 November 2025 Yes. In the Tax Audit Report (Form 3CD), Clause 32 specifically deals with reporting of brought forward losses and depreciation, including current year losses eligible to be carried forward.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

22 November 2025 Form 3CD – Clause 32
• This clause requires the tax auditor to state details of losses or depreciation that are to be carried forward under the Income-tax Act.
• It covers both past losses brought forward and current year losses that will be carried forward to subsequent years.
• The auditor must report whether the assessee has properly complied with provisions relating to carry forward of losses (like filing returns within due dates under section 139(3)).
• Breakdown of Clause 32 Reporting
• 32(a): Details of brought forward losses/depreciation from earlier years.
• 32(b): Whether the return of income for the year in which loss was incurred was filed within the prescribed time (important for eligibility to carry forward).
• 32(c): Losses/depreciation to be carried forward to the next year.
• 32(d): Whether the assessee has properly disclosed and complied with provisions for carry forward.

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