Schedule CFL is not saving 0 as carry-forward losses for belated returns!!

You do not need to force Schedule CFL to retain zero. For a belated return, Schedule CFL should effectively be NIL / ignored. The validation message is informational, not fatal. Proceed with filing without attempting to override CFL, ensuring losses are set off to zero in current year schedules and not claimed for carry-forward anywhere.

• If the utility auto-populates a positive loss in CFL despite belated status, stop and review.

• If the loss relates to:

  • Speculation / specified business (73 / 73A)

  • Capital losses with complex intra-head set-off

• If filing is under defective return correction or scrutiny → escalate to your CA.

In the ITR utility app, Schedule CFL was auto‑populating the loss despite it being a belated return. A bug in the app seemed to be at play!

The return was submitted regardless of the "errors", and an immediate notice of e‑Proceedings was received. A response was submitted by agreeing to the obvious, and the problem was solved!

Schedule CFL in a belated ITR-3:

• In a belated return, current-year business and capital losses can't be carried forward (Sec 80), so CFL for the current year's losses should be nil (the utility handles it). Brought-forward losses from earlier years can still be set off, and house property losses and unabsorbed depreciation can be carried forward even in a belated return.