Business Losses

Q1: Is inter-head setting off allowed for broght forward normal business losses?

Ans. Brought fwd normal business loss is not allowed inter head setting off. Normal business loss for the current year is allowed setting of from income under any other head. Current loss not being able to be set of is carried forward to the next tax year, and is set of only from income under the head Income from Business. [Reference S.57(1)]

Q2: Which of the two following broght fwd loss is set of first: depreciation loss or normal business loss.

Ans. According to Sec. 57(4), depreciation loss is set of first by adding it in the depreciation deductions for the the year, and thereafter b/f normal business loss is set of from net income.