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Statutory Compliance

Budget 2017: Government allows Carry Forward and Set Off off Loss for Startups

Source | Aparna Mishra | https://inc42.com

As per the Income Tax Act, a company is not eligible to carry forward and set off its losses if 51% or more of the voting power in the year, in which the set-off is claimed, is not beneficially held by the same shareholders that beneficially held 51% or more voting power on the last day of the previous year in which the loss was incurred.

Section 79 of the Income Tax states, “Where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless on the last day of the previous year the shares of the company carrying not less than 51% of the voting power were beneficially held by person who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred.”

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Ramesh Ranjan

A Business Consultant, Executive Coach, Visiting Professor, Content Manager & Editor. Ex IIM NASSCOM LRC, ex VP NHRD Bangalore Chapter, ex VP-HR@Schneider Electric, Head HR@ APC, Caltex,Co Systems, Natural Remedies. https://www.linkedin.com/in/rameshranjan/

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