Filing a return for a year of little income

Dear Sir,

With reference to your above query, I would like you to consider the following noteworthy points.

A) Set off and carry forward of Loss under the head of Capital Gains is covered under section 74 of the Income Tax Act 1961.

      As per this section :

1. Short term capital loss could be set off either against the short term capital gain or long term capital gain.

 2. Long term capital loss could be set off only against the Long term capital gain. It cannot be set off agianst the short term capital gains.

 3. If loss could not be set off then unabsorbed loss would be carried forward for set off till 8 assessment years.

B) Section 80 of the income tax act 1961 provides that unless the retun of loss has filed in accordance with section 139(3) of the Income tax act 1961 the assessee cannot carry forward the loss.

C) Section 139(3) requires an assessee to file the return of income as per section 139(1) which means that the return of Income should be filled with the due dates and in the prescribed forms.

Summary.

1. Try to sett off the capital loss. If could not be set off then carry forward the same to the next assessment year.

2. To avail the benefit of carry forward or set off, it is mandatory for an assessee to file the return of income.

3. Hence, even if there is no income under any head except the capital loss, It is sugessted to file the return of Income so that you could avail the benefit of carry forward. If return is not filled then carry forward of the loss would not be possible.

                  I hope I have answered your query.

Thank you experts, for the clarifications and details.

I would e-file my return soon after this FY is over and well ahead of Jul 31!