If you earn losses from
business, you can carry forward your loss to the subsequent years where such
loss cannot be set-off due to the absence or inadequacy of sufficient profits
in the relevant previous year.
Following are the
conditions that must be considered for carry forward, carry forward and set-off
of losses:-
1. The loss should have been incurred in business, profession or
vocation.
2. The loss should not be in nature of a loss in the business of
speculation.
3. The loss may be carried forward and set-off against the income
from business though not necessarily against the profits and gains of the same
business or profession in which loss was incurred, but a loss carried forward
cannot under any circumstances, be set-off against the income from any other
head other than profits and gains of business or profession.
4. The loss can be carried forward and set-off against the
profits of assessee who incurred that loss, it can now be carried forward and
set-off by his successor only if he carried on the same business.
5. The loss can maximum carry forward for the period of 8 yrs
immediately succeeding the assessment year in
which loss was incurred.
6. As per section 80 of income tax act, 1961, the assessee in
order to carry forward the loss to subsequent year, he must required to file
income tax return.
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