What are the conditions to keep in mind while carrying forward losses for set off?
Following conditions must be kept in mind while carrying forward losses for
set off:
- Any losses of past year can be set-off only against
income from that respective head of income (Inter head adjustment is not
possible).
- However, unabsorbed depreciation can be set-off
against any other head.
- All losses can be carried forward and set-off
for next 8 financial years following the previous year in which the loss arose.
This is not applicable to loss due to owning and maintaining of race horses.
- Unabsorbed depreciation can be carried forward
for any number of years.