what is treatment of losses in partnership firm,s IT return? Is the loss carried forwarded in next year? or divided among partners as per sharing ratio? how it is adjusted in next year & so?
mohit (account) (51 Points)
15 February 2010what is treatment of losses in partnership firm,s IT return? Is the loss carried forwarded in next year? or divided among partners as per sharing ratio? how it is adjusted in next year & so?
Amir
(Learner)
(4016 Points)
Replied 15 February 2010
Dear Mohit,
Loss is carried forwd ion the IT return of the firm..
But when a partner retires from the firm then the Firm cannot carried forward loss attributable to the share of the retiering partner...
Nor the share in Firm's loss can be carrd forwd by the retiering partner in his individual return..
Max Payne
(employed)
(2569 Points)
Replied 15 February 2010
Dear Mohit,
Business loss can be carried forward for a period of 8 years following the previous year, provided you have filed the IT return within due date.
This can be set off only against business income arising during the period of the next 8 previous years.
So if u arrived at loss from PGBP in 2008-09, it can be carried forward and set off against PGBP upto and including Previous year 2017-18.
Loss cannot be distributed to partners of the firm... it must be carried forward by partnership only.... But there is one section 78 of income tax act to look into.. The loss attributable to a retiring partner's share cannot be set off or carried forward by the firm....
However, this condition does not seem to cover unabsorbed depreciation..
This is only a general treatment, the exact case has to be looked deeper into....
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
