We all know an income tax return must be filed when your gross income (before allowing any deductions) is more than Rs 2,50,000 – but what if you have incurred a ‘loss’. Should an income tax return be filed by you if you have incurred a loss?
Depending on the type of loss, you may have to file an income tax return with details of the loss. Filing a return for your losses helps to carry them forward to future years, in which these can be set off against future gains when they arise.
If you have capital losses (loss under the head capital gains) or loss from your business or profession, you must file an income tax return. If you have any income in the year of loss, your losses can be set off against such income. This will reduce your taxable income. If you do not have any income or losses are higher than income, you will be allowed to carry forward losses and adjust them against future income in your returns for future years. Losses from house property, capital loss and business loss is allowed to be carried forward for 8 years.
An income tax return must be filed in the year of loss so that leftover loss can be carried forward, it must also be submitted before the due date. The due date for filing returns for AY 2015-16 (for incomes & losses) incurred in FY 2014-15 is 31st August 2015. (Do note that losses from house property are allowed to be carried forward and can be set off even though the return may not have been filed by the due date).