Carry Forward and Set Off of Business Losses – Sec 72

SEC – 72: CARRY FORWARD AND SET OFF OF BUSINESS LOSSES

Where the loss under the head PGBP (other than the loss from speculation business and specified business u/s 35AD), could not be set off in the same AY, because either the aseessee had no income under any other head or the income was less than the loss, then such loss can be carried forward to the following AYs and can be set off only against the PGBP income. The losses can be carried forward till 8 Assessment Years.

NOTES:

  • Loss can be carried forward even if business has been discontinued.
  • Losses can be set off only by the assessee who has incurred the loss except in the case of Inheritance, Amalgamation, succession and demerger
  • Unabsorbed depreciation can also be carried forward indefinitely although it is not a business loss.
  • The return of loss must have been furnished before the date prescribed u/s 139(1), otherwise the loss cannot be carried forward.

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