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Tax Loss Carried Forward in India

Mohanraj J (1166 Points)

04 August 2020

Dear Friends,
What is meant by Tax Loss Carried Forward ? It is applicable to India?

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 August 2020

As per income tax act, After making the appropriate and permissible intra-head and inter-head adjustments in income of taxable person in computation of total income, there could still be unadjusted losses. These unadjusted losses can be carried forward to future years for adjustments against income of that years. The rules as regards carry forward differ slightly for different heads of income.

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Mohanraj J (1166 Points)
Replied 05 August 2020

Dear Sagar Ji, GM. Our company's is running losses for the past two years. So, the same Net losses values are equal to Tax Loss Carried forward?

eg. FY 18-19 Net Loss 75 Lakhs
FY 19-20 Net Loss 50 Lakhs
Total 125 Lakhs. These losses are Tax Losses carried fwd?.....

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 05 August 2020

A return of loss is required to be furnished for determining the carry forward of such losses, by the due date prescribed for different assessees u/s. 139(1) of the income tax Act.

There is provision regarding calculation of Business profit/loss under head Profit and Gain from business and profession as per Income tax act (not as per books of accounts)
If you have a business loss (as per IT act), and you furnished the return of loss within a due date of furnishing return, claimed the losses in that year than only loss can be carried forward to next year.

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