Carry forward and set off of losses in case of change in constitution of firm or on succession - (New) Section 119(1) & (2) / (Old) Section 78

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.... Limitations on Carry Forward of Losses [ Section 119(1) ] where: • there is a change in the constitution of a partnership firm during the tax year; • the change occurs because of the retirement or death of a partner; and • the firm seeks to carry forward and set off losses incurred before or during such change. The restriction applies only to the po....

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....ts such transfer Under Section 78 of the Income Tax Act, 1961 [ Upto 31.03.2026 ] • The losses and unabsorbed depreciation can be carried forward by a firm only. • Section 78(1) provides that where a change in constitution of firm takes place on account of retirement of partner or death of the partner then, the firm shall not carry forward and set off the fol....