ITR form suggestion

I have past business losses, which are to be carried forward this A/Y but i have shut down my business 2 years before, last year filled ITR-3. Now i have only salary income. Which ITR form to be furnished to show Salary Income and Carry Forward of past Business Losses ?

Replies (2)
Quick Summary
A taxpayer who closed their business two years ago has only salary income but wants to carry forward past business losses. The discussion clarifies that ITR-2 should be filed, as ITR-1 does not allow reporting brought-forward losses, while business losses can only be set off against eligible business income.

Since you have only salary income during the year but wish to continue reporting the brought-forward business losses, you should file ITR-2. ITR-1 cannot be used as it does not provide for reporting carried-forward losses. The brought-forward business loss cannot be set off against salary income and can be adjusted only against eligible business income arising within the permissible carry-forward period of 8 assessment years.

The right ITR form is determined by the nature of the income and the taxpayer's position, rather than the quantity of income.

ITR-1 (Sahaj): For resident individuals with salary/pension income, income from house property, and other sources, subject to the prescribed conditions. 

ITR-2: For individuals/HUFs with capital gains, multiple house properties, foreign assets/income, etc., but no business or professional income. 

ITR-3: For individuals/HUFs with business or professional income, including freelancing, consultancy, commission, brokerage, or proprietorship bus

ITR-4 (Sugam): For qualified taxpayers who choose presumptive taxation under sections 44AD, 44ADA, or 44AE, subject to eligibility requirements.
Please provide your income sources (salary, capital gains, business/professional income, home property income, etc.), residence status, and if you want presumptive taxes. Based on these facts, the suitable ITR form may be appropriately recommended.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register