Budget 2016 Changes in Time limit for carry forward & set off of loss
The existing provisions of section 73A of the Act provide that any loss, computed in respect of any specified business referred to in section 35AD shall not be set off except against profits and gains, if any, of any other specified business. Further, section 80 of the Act inter-alia provides that a loss which has not been determined in pursance of return filed in accordance with the provisions of sub-section (3) of section 130, shall not be carried forward and set-off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) or section 74 or sub-section 74A.
In accordance with the scheme of the Act, this loss is to be allowed if the return is filed within the specified time i.e. by the due date of filing of the return of the income as provided in section 80 for other losses determined under the Act.
Accordingly, it is proposed to amend section 80 so as to provide that the loss determined as per section 73A of the Act shall not be allowed to be carried forward and set off if such loss has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139.
It is also proposed to amend the said sub-section (3) of section 139 so as to give reference of sub-section (2) of section 73A in the said sub-section.
These amendments will take effect retrospectively from 1stApril, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years.
Clause 35 of Finance Bill 2016
Clause 35 of the Bill seeks to amend section 80 of the Income-tax Act relating to submission of return for losses.
The aforesaid section, inter alia, provides that a loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall not be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A.
It is proposed to amend the said section 80 so as provide that the loss under sub-section (2) of section 73A shall also be not allowed to be carried forward and set off if such loss has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139.
This amendment will take effect retrospectively from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-2017 and subsequent years.
Clause 69 of Finance Bill 2016
Clause 69 of the Bill seeks to substitute the section 153B of the Income-tax Act by a new section 153B relating to time limit for completion of assessment under section 153A and 153C.
It is proposed to substitute the existing section 1 53B to simplify the said section by retaining those provisions which are relevant to the current provisions of the Income-Tax Act. The changes proposed in existing time limit of assessment are as under–
(i) The limitation for completion of assessment under section 153A, in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 1 53A and in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 1 32A be changed from existing two years to twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was
(ii) The limitation for completion of assessment in case of other person referred to in section 153C shall be changed from existing two years to twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or be nine months (which as per the existing provision is one year) from the end of the financial year in which the books of account or documents or assets seized or requisitioned are handed over under section 1 53C to the Assessing Officer having jurisdiction over such other person, whichever is later.
It is also proposed to simplify section 1 53B by substituting certain provisions which are no more relevant with the current provisions.
This amendment will take effect from 1st June, 2016.
[Clause 35 & 69]
