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Carry Forward and Set-Off of Loss from activity of Owning and Maintaining Race Horses (Section 74A)

Loss from the activity of owning and maintaining race horses in any assessment year shall be set off against the income from the activity of owning and maintaining race horses in the same assessment year.

But, if any loss from the activity of owning and maintaining race horses, could not be set off in the same assessment year, it shall be carried forward and set off only against the income from the activity of owning and maintaining race horses in the subsequent assessment years. Such set off is, however, permitted only if the activity of owning and maintaining race horses is carried on by the assessee in the previous year relevant to the assessment year in which the loss is sought to be adjusted.

The loss can be carried forward for a maximum of 4 assessment years, immediately succeeding the assessment year for which the loss was first computed.

The following points one should keep in view —

  1. Such loss can be carried forward only if the activity of owning and maintaining race horses is carried on by the assessee in the previous year in which the brought forward loss is sought to be set off.

  2. Loss can be carried forward for four assessment years immediately succeeding the assessment year in which the loss was first computed.

  3. Such loss cannot be carried forward unless return is filed within the time limit of section 139(1) [see para 135.1-4].

  4. For this purpose, loss shall be calculated as follows—

Amount of stake money xxxx
Less: Revenue expenditure incurred by the taxpayer wholly and exclusively for the purposes of maintaining such horses xxxx
Balance (if it is negative, it is taken as loss from the activity of owning and maintaining race horses) xxxx
  1. . The aforesaid provisions of section 74A are applicable only in the case of loss from the activity of owning and maintaining race horses. Loss from the activity of owning and maintaining other race animals is governed by section 72 and not by section 74A.

CONTENT : Set off or Carry Forward and Set off of Losses [Sections 70 to 80]

Related Topics... 'Set Off or Carry Forward and Set Off of Losses'

1. Set off or Carry Forward and Set off of Losses [Sections 70 to 80]

2. Carry Forward and Set Off of Loss from House Property [Section 71B]

3. Carry Forward and Set off of Business Losses other than Speculation Loss (Section 72)

4. Carry Forward and Set-Off of the Accumulated Business Losses and Unabsorbed Depreciation Allowance in Amalgamation or Demerger, etc. (Section 72A)

5. Carry Forward and Set off of Speculation Loss (Section 73)

6. Carry Forward and Set-Off of Loss from activity of Owning and Maintaining Race Horses (Section 74A)

7. Carry Forward and Set-Off of Capital Loss under the head 'Capital Gains' (Section 74)

8. Carry Forward and Set off of Loss of a 'Specified Business' referree in Section 45AD (Section 73A)

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