GHANSHYAM BIHANI (ACCOUNTANT) (25 Points)
12 September 2013Business loss can be set off against profit from other heads of income. But is it mandatory or at the option of assesse.
suppose business loss is Rs. 5,00,000/- & income from other sources is Rs. 1,50,000/-. Can the assesse carry forward whole of business loss,without setting off from other income.
Siddharth
(Student)
(128 Points)
Replied 13 September 2013
Hi,
If you dont set off, you will end up paying more tax as as result of more taxable income.
Business loss can be carry forwarded only when there is no other income from any other head except salary.
That means business loss cant be forwarded if there is income under any other head(except salary).
And moreover if you carry forward a business loss, then such carry forwarded business loss can be set off only under that head and not under any other head whereas in current year you can setoff with anyother head except salary.
Why is that you wish to carry forward a loss when there is income? Any reason?.
Siddharth
(Student)
(128 Points)
Replied 13 September 2013
Hi,
You can go through section 72 which deals with carry forward of PGBP losses
and 71 which deals with set off of losses.
It is mandatory to set off if there is income under other head.
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