Carry forward of losses in FM

if our profit before tax is negative but we have sufficient profit from other sources, then will we pay tax and show the amount as addition to negative NPBT?
Replies (6)

Business loss can be set off against any income except income from salaries.

e.g. if PGBP is (10,000) and income from other source is 15,000. Your total income would be 5,000.

No but I'm talking about the case in FM, capital budgeting
Hey in capital budgeting we e evaluating particular proposal only.... So consider that only.... Whether that project is generating NPV Or not
No but when we calculate the CFAT for like 4 to 5 years, in that case.
Hey in capital budgeting first we evaluate the project whether that is NPV generating or not... If not generating then we didn't accept that project.... Once u accept the project then there is no decision making.... Just follw normal tax provisions set off and carry forward
depends on what are you evaluating. if you are evaluating a particular project and getting loss then ignore tax effect of loss carry forward. if you are evaluating the the company as a whole, take all npbt or lossbt from all sourcesand net off and then apply tax on aggregate. For eg different businesses [A +B + (C) + D]x tax rate= tax cash outflow. Here (C) means negative npbt of business C.

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