26 July 2010
In case an assessee has b/f business losses and he has losses in the current year 2..but he has income from other business and other sources.so can he 1st set-off his b/f business losses and then the current years' losses?????? This will reduce the tax liability.....
26 July 2010
Loss can be set off against income from any business - The conditions in proviso (i) of section 72(1) requiring continuation of the carrying on of the same business by the assessee do not provide that the unabsorbed loss shall be set off against income from the same business. If the assessee continues to do the same business, then carried forward unabsorbed loss may be set off against the income of the assessee against any business - Smt. Tara Devi Behl v. CIT [1996] 218 ITR 541/86 Taxman 342 (Punj. & Har.).
SO u can set off loss from one business against other business.
However u cannot set off c/f business loss from other sources income. It can be set off against business income only.
26 July 2010
In addition to what Mr. Maheshwari mentioned above, current year loss should be set off first against current year income. Only if there is any surplus, you can set off the B/F loss.
You cannot setoff B/F loss first before setting off current year loss.
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