Section 139(3): File Loss Income Tax Return [AY 2020-21]

FILE IT RETURN

A person is not required to file an income tax return (ITR) if his income from all the five heads is within the maximum non-taxable limit. [Rs. 2.5 lakh for persons below 60 years]

The limit is after the deduction of losses but before providing chapter VI-A deduction [80C to 80U].

Normally losses are eligible for carrying forward up to next 8 years. This loss can be used to reduce tax liability during the carryforward period. [Unabsorbed losses]

To take the benefit of carrying forward, a taxpayer needs to file IT return within the due dates. [139(1)]

Further, a revised return with loss is also a valid return for carrying forward. [139(5)]

In this article, we will cover the tax law for loss return filing as given under Section 139(3)

Loss Return Provision under Section 139(3)

A person should file the tax return within the due date to carry forward the following losses:

Loss under any Business or Profession
Loss on sale of capital assets [Both Long term and short term]

Loss from house property is eligible for carrying forward even if the tax return is filed after the due dates.

Set off of business and the capital loss is possible in late income tax return also. [139(4)]

Due Date for Return Filing [AY 2020-21]

Following are the due dates for individuals:

Return of	Due Date of Return Filing*
An Individual, who should file Tax Audit	15th February 2021
A working partner of a firm, where the firm is covered under Tax Audit	15th February 2021
Any Individual who is not covered above (Most of us fall under this)	10th January 2021

*Due dates are the extended date.

Note

Outstanding unabsorbed losses of the earlier year will continue to carry forward even if the tax return is late.

Frequently Asked Question [FAQ]

Question	Answer
I have salary income and also have intraday trading losses. How can I carry forward this loss in the income tax return (ITR)?	It’s a Speculative Business loss [use ITR 3] This Loss can be carried for the next 4 years If the return is filed within due dates.
Do I have to file a tax return before due dates if my income is below Rs 2.5 lakhs and a loss from the share market?	I recommend filing the tax return before the due date to carry the forward loss. This carry forward loss will help in reducing future tax liability.
can I show my agricultural loss in my tax return?	No You can’t show it because a tax exemption is already given to agricultural income.

Happy filing!