Condition under which losses can be carried forward and set off against future profits : Clause 119 of the Income Tax Bill, 2025 Vs. Section 78 of the Income Tax Act, 1961
12 April, 2025
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Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply. Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off ... Summary
Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply.
Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off for losses attributable to retired or deceased partners upon firm reconstitution, disallows successors (other than by inheritance) from using predecessor losses, and restricts non-public companies from setting off prior losses after shareholding changes unless continuity conditions including original beneficial owner control or start-up safeguards are met; specified exceptions and ongoing compliance requirements are provided.
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