Return of partnership firm with loss

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2014 DEAR SIR,

I HAVE A CLIENT WITH PARTNERSHIP FIRM. IN FY 2012-13 THERE IS LOSS, SO CAN I FILE INCOME TAX RETURN WITH LOSS? IS THERE ANY RULES TO C/F LOSS

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 January 2014 Return filing is mandatory for partnership firm irrespective of profit/loss.

If the firm is desirous of carry forward the loss, return has to be filed on or before the 'due date' of filing of the return.

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2014 thank u sir,

how can i file that return pls guide

should i transfer that loss to partner's capital account?

in ITR 5 HOW IT COMES

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Filing Return of Partnership Firm with Loss — Here's what you need to know and do:

1. Mandatory Return Filing
Yes, partnership firms must file Income Tax Return (ITR-5) even if there is a loss.

To carry forward the loss, the return must be filed on or before the due date (usually 30th September of the assessment year).

2. Carrying Forward Loss
Losses from the partnership firm can be carried forward only if the return is filed on time.

Losses can be set off against future profits of the firm (subject to Income Tax Act rules).

3. Treatment of Loss in Accounts
The loss remains with the firm and is not directly transferred to partners’ capital accounts for tax purposes.

The loss affects the profit and loss account of the firm, reducing the firm's total income.

Partners receive their share of profit or loss based on the partnership deed.

4. In ITR-5 Form
The loss is shown in the Profit & Loss Schedule of the ITR-5.

There are specific schedules in ITR-5 where you report:

Business Income (or Loss)

Losses to be carried forward

The loss carried forward will be reflected in the next year’s return as brought forward loss.

5. Practical Steps to File Return with Loss
Prepare financial statements (Profit & Loss Account and Balance Sheet).

Show the loss under business income in ITR-5.

Submit the return online or manually before due date.

If filing late, loss carry forward benefits are not allowed but filing is still mandatory.

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