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Carry forward and set off of business loss other than speculation loss – Section 72

If there is a loss from a business/profession and it cannot be set off or only partially set off under the same head or other head of income under section 71 then  such loss can be carried forward to subsequent years. The loss so carried forward can be set off from profits and gains of any business or profession (not from income under other heads).

Loss can be carried forward for a period of eight years from the year in which the loss is occurred.

Loss can be set off even if the business to which the loss relates is not in existence in the year of set off.

These provisions doesn’t apply to speculation loss.

Loss can be carried forward only when a return is filed by assessee under section 139 within due date. If return is submitted after due date the delay may be condoned if a few conditions are satisfied. Circular no. 8/2001 dated may 16 2001

Loss under section 35AD can be set off only from profits of businesses referred to in section 35AD.

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