Filing of return of loss on or before the due date under section 139(1) mandatory for carry forward of loss from specified business under section 73A [Section 80]

Related amendment in section: 139(3)

Effective from: A.Y.2016-17

(i) Under section 73A, any loss, computed in respect of any specified business referred to in section 35AD shall not be set off except against profits and gains, if any, of any other specified business. Such loss can, however, be carried forward indefinitely for set-off against profits of the same or any another specified business.

(ii) Section 80 requires mandatory filing of return of loss under section 139(3) on or before the due date specified under section 139(1) for carry forward of the following losses –

(1) Business loss under section 72(1)

(2) Speculation business loss under section 73(2)

(3) Loss under the head “Capital Gains” under section 74(1)

(4) Loss from the activity of owning and maintaining race horses under section74A(3)

(iii) However, there was no such stipulation for carry forward of loss from specified business under section 73A.

(iv) Accordingly, section 80 has been amended so as to provide that the loss determined as per section 73A shall not be allowed to be carried forward and set off if such loss has not been determined in pursuance of a return filed in accordance with the provisions of section 139(3).

(v) Correspondingly, section 139(3) requiring filing of return of loss mandatorily within the time allowed under section 139(1) for claiming carry forward of losses under sections 72(1), 73(2), 74(1) and 74A(3) has been amended to include reference to section 73A(2).