- This topic has 1 reply, 2 voices, and was last updated 8 hours ago by
.
- Posts
i have a query as of to deduct the trading loss of current year sould we compulsorily use up the current yr total profits and then carry them back? bcoz i hv come across some qtns where they did not follow this order. but again even corporate tax says we first hv to use up current yr total profits nd only then carry back the losses.
For COMPANIES, any carry back of a trading loss can only be done after a current period claim is done to the fullest extent. The set off in both cases is against total profits before qualifying charitable donations.
For UNINCORPORATED businesses (sole traders and partners in a partnership), although they must also set off losses to the fullest extent against total/net income, it can be done in any order; i.e. current year then carry back, or carry back then current year. They could also do just the current year claim and just the carry back claim if they prefer – they are two separate claims and can be done independently of each other.
- You must be logged in to reply to this topic.