Permanent Account Number (PAN) Introduction PAN is a ten-digit alphanumeric identifier issued by the Income-tax Department to identify taxpayers uniquely. It is mandatory for income-tax filings, high-value financial transactions, and correspondence with the tax authorities. Aadhaar can be used in lieu of PAN. How to obtain PAN A resident applies for PAN inForm 49A, while… Read More »

Losses from certain specified sources falling under the head “Income from other sources” Set-off of losses from activity of owning & maintaining horse races Loss from owning & maintaining horse races can be set off only against income from the same activity. If there is no stake money income in a year, the entire expenditure… Read More »

Loss under the Head Capital Gains Introduction Losses under “Capital Gains” are classified as Short-term Capital Loss (STCL) and Long-term Capital Loss (LTCL). They must be distinctly computed and disclosed in income tax returns, with specific rules for set-off and carry forward. Set-off and Carry Forward Rules Intra-head Adjustment: o STCL: Can be set-off against… Read More »

No Set-off of Loss from Undisclosed Income Introduction Section 79A prohibits the set-off of any loss (brought forward or otherwise) or unabsorbed depreciation against undisclosed income discovered through search, requisition, or survey. Prohibition on Set-off of Losses Losses cannot be set-off against undisclosed income found during: Asearchunder Section 132. Arequisitionunder Section 132A. Asurveyunder Section 133A (excluding Section 133A(2A)). Meaning of Undisclosed… Read More »

Restriction on Losses of Closely Held Companies Introduction Section 79 restricts the set-off of carried forward losses in closely held companies if substantial changes occur in voting power. Exceptions apply for eligible start-ups and under specific circumstances like strategic disinvestment or resolution plans under IBC. Conditions for Carry forward and Set-off of Losses Closely Held Companies:… Read More »

Set-off and Carry-forward of Losses in Amalgamation of Banks, Government Companies, and Cooperative Banks Introduction In cases of amalgamation involving banking companies, government general insurance companies, or cooperative banks, the successor entity can carry forward and set off the accumulated losses and unabsorbed depreciation of the predecessor entity, provided specific conditions are fulfilled. Amalgamation of… Read More »

Loss under the Head of PGBP Introduction Business losses may arise as speculative, non-speculative, or specified business losses. Provisions regulate the set-off against other incomes and the carry-forward period for unadjusted losses. Set-off and Carry-forward of Losses Set-off:Adjusting losses against income in the same assessment year. o Intra-head Adjustment: Loss from one business source of income can… Read More »

Loss Under the Head “House Property” Introduction Loss under the head “Income from House Property” arises when: Self-Occupied Property: The interest on housing loans exceeds the annual value (nil for self-occupied). Let-Out Property: The aggregate of interest on housing loans and municipal taxes exceeds the rental income. Losses can be set off against other incomes… Read More »

Carry Forward of Losses Introduction When losses cannot be fully set off within the same year due to inadequate eligible profits, they may be carried forward to subsequent assessment years for adjustment against eligible profits under the same income head. This ensures taxpayers can efficiently manage losses over time. Key Provisions for Carry Forward of… Read More »

Inter-Head Adjustment of Losses Introduction Inter-head adjustment allows for the set-off of losses from one head of income against income from another head within the same assessment year. Certain exceptions apply, such as capital losses being adjustable only against capital gains. Rules for Inter-Head Adjustment House Property Losses: o Losses from house property can be… Read More »