Section 41(5) - Adjustment of Loss - Income Tax - Ready Reckoner - Income Tax

Section 41(5) - Adjustment of Loss Where the business or profession referred to in this section is no longer in existence and there is income chargeable to tax in respect of that business or profession, any loss, not being a loss sustained in speculation business, which arose in that business or profession during the previous year in which it ceased to exist and which could not be set off against any other income of that previous year shall, so far as may be, be set off against the income chargeable to tax under the sub-sections aforesaid. The second to the rule that business or profession loss can be carried forward only for 8 years is given by section 41(5) . This section is applicable if following conditions satisfied: The Business or Profession is discontinued. Loss of such Business or Profession pertaining to the year in which it is discontinued could not be set of against any other income of that year. Such business is not a speculation business. After discontinuance of such business or profession, there is a receipt which is deemed as business income u/s 41(1), (3), (4) or (4A) . NOTE:- The unabsorbed loss pertaining to the year in which business/profession was discontinued is permitted to be set off against notional business income u/s 41(1), (3), (4) or (4A), even after 8 years. It can be set off even if return of the loss is not submitted in time.