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Report No. 12

73. Set-off of loss from one head to another.-

(1) Where in respect of any assessment year the net result of the computation under any of the heads of income mentioned in section 14 [6] other than "Capital gains" is a loss to the assessee, the assessee shall, subject to the other provisions of this Chapter, be entitled to have the amount of such loss set off against his income assessable for that assessment year under any other head except "Capital gains".

[Section 24(1), main para.]

(2) Where for any assessment year the net result of the computation under the head "Profits and gains of business, profession or vocation" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss has not been wholly set off in accordance with the provisions of sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no income under any other head, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and.

(i) it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him and assessable for that assessment year, provided that the business, profession or vocation for which the loss was originally computed continued to be carried on by him in the previous year relevant for that assessment year; and

(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.

[Carry forward and set off of business losses]
[Section 24(2), main para., part]

(3) Where any allowance or part thereof is under sub-section (2) of section 32 [section regarding depreciation] or sub-section (4) of section 35 [Section regarding scientific research expenditure] to be carried forward, effect shall first be given to the provisions of sub-section (2).

[Section 24(2), proviso (b) part and section 10(2)(xiv) 2nd proviso (f), part.]

(4) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.

[Section 24(2), main para., part]



Income-Tax Act, 1922 Back




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