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Set off of loss in search cases - Amendment in the provisions of section 79A of the Act 1. Chapter VI of the Act deals with aggregation of income and set off or carry forward of loss. In Sections 70-80 of the Act there are specific provisions relating to set off or carry forward and set off of losses while computing the income under various heads and with respect to different classes of persons. 2. It is noticed that in some cases, assessees claim set off of losses or unabsorbed depreciati
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FAQ :
Budget 2022 prevents the set-off of any loss or unabsorbed depreciation against undisclosed income that is detected during search or survey proceedings.
This amendment takes effect from 1st April 2022 and applies to the assessment year 2022-23 and subsequent assessment years.
Undisclosed income includes income represented by money, bullion, jewellery, or other valuables not recorded in books before a search/survey, or income not disclosed to tax authorities before the search/survey. It also covers false expense entries found during a search or survey.
The change has been made to ensure that proper tax is paid on income detected through searches or surveys, and to increase deterrence against tax evasion.
The article notes that currently, there is no provision to disallow set-off in regular scrutiny assessments, implying this new restriction specifically targets income detected during search and survey proceedings.
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