For many reasons, a person may forget to file a tax return within the stipulated period or even if income tax return filing is doneÂ , he files return of income late or forgets to claim a refund of tax that is legally allowable.
[infobox style=”alert-success”]CBDT has issued new Circular on this . Please read New Circular for Delay in Filing Return ! [/infobox]
It is well known that filing late return will result in loss of carry forward of losses (business or capital loss) . This is due to combine section 80 of the Income Tax Act and Section 157 of the Income Tax (IT) Act, 1961 which provides for two conditions (given below) to be satisfied before business or capital loss is allowed to be carried forward.
- the return of loss must be submitted on or before the due date.
- The loss has been determined by the assessing officer (AO)
Now, if either return is filed late or not filed at all during the allowed time ( one year from the end of the assessment year), your chance of the carry forward of capital or business loss or refund will be lost.