Re: Loss Carry Forward under DTVSV
We had returned a net loss of Rs. 12,00,000/- for the AY 2016-17. During the course of assessment u/s. 143(3), there was an addition to the tune of Rs. 30,00,000/-. So, the net income was assessed at Rs. 18,00,000/-. The appeal is pending as on 31.01.2020.
Out of the returned loss of Rs. 12,00,000/-, we have already set off a loss of Rs. 5,00,000/- in the AY 2017-18 and the balance loss of Rs. 7,00,000/- is still available as on date. We do not foresee any profits in the subsequent years to set off the balance loss of Rs. 7,00,000/- and it is bound to lapse.
In this scenario, what is the disputed income for which we have to file the application under DTVSV Act for the AY 2016-17?
As per VSVA, in a case where the dispute in relation to an assessment year relates to reduction of Minimum Alternate Tax (MAT) credit or reduction of loss or depreciation, the appellant shall have an option either to (i) include the amount of tax related to such MAT credit or loss or depreciation in the amount of disputed tax and carry forward the MAT credit or loss or depreciation or (ii) to carry forward the reduced tax credit or loss or depreciation. CBDT will prescribe the manner of calculation in such cases.
You have an option to pay the tax on the deduction claimed on brought forward loss in future years. so pay tax on 2300000 and balance loss will be forgone