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In part 3 advice in offsetting losses from future profits why we are deducting 5000(2500*2) frm 6755 and gettng 1755
In 2016/2017 ??? Kindly explain
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in total there is a saving of 6755 if we offset loss from future profits of the same trade which is calculated as 33773*20% = 6755 tax saving. and this 6755 saving is split into three years 14/15, 15/16, and 16/17.
the same trade profits available in future years are 12500 per year so by offsetting our loss of 33773 in 14/15 we will save tax of 12500*20%=2500 the remaining loss will be(33773-12500) = 21273 which we will carry forward to 15/16 so the tax savings in 15/16 is going to be 12500*20%= 2500 after deducting the loss in 15/16 there will be a remaining loss of (33773-12500-12500)=8773 which we will carry forward to 16/17 so the tax savings in 16/17 is going to be 8733*20% = 1755..
tax saved in 14/15= 2500
in 15/16=2500 and
in 16/17=1755 which sums upto 6755 that is our total savings if carry forward the loss.i hope you have understood it now.
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