Quick Summary
Section 79 of the Act restricts carrying forward and setting off of losses in cases of companies, other than the companies in which the public is substantially interested. It prohibits setting off of carried forward losses if there is change in shareholding. The carried forward loss is set off only if at least 51% shareholding (as on the last date of the previous year) remains same with the company on the last date of the previous year to which the loss belongs. 2. However, some relaxatio
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FAQ :
The period for eligible start-ups to carry forward and set off losses has been extended from seven years to ten years from the date of incorporation.
Previously, companies (other than public ones) faced restrictions on carrying forward losses if shareholding changed. For eligible start-ups, the loss had to be incurred within seven years of incorporation, and all original shareholders had to retain their shares.
Yes, the condition that all shareholders from the year the loss was incurred must continue to hold their shares still applies, but the relaxation now covers losses incurred within the first ten years of incorporation.
This amendment takes effect from 1st April 2023, applying to the assessment year 2023-2024 and subsequent years.
The amendment proposes to amend the proviso to sub-section (1) of section 79 of the Act.
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