AS PER THE PROVISIONS OF THE INDIAN INCOME TAX ACT, A LOSS INCURRED IN AN YEAR IS ALLOWED TO BE CARRIED FORWARD
TO THE SUBSEQUENT YEARS TO BE SET OFF AGAINST ANY PROFIT OR GAINS IN THOSE YEARS, SUBJECT TO CERTAIN CONDITIONS.THIS PRE-SUPPOSES THAT AN ASSESSEE SHOULD INCUR LOSSES IN THE INTIAL YEARS AND ONLY LATER SHOULD MAKE GAINS.THIS IS AGAINST NATURAL JUSTICE.TAKE THE CASE OF AN ASSESSEE WHO MADE CONSIDERABLE GAINS IN THE INITIAL YEARS AND PAID TAX.SUPPOSE HE INCURS LOSSES IN THE SUBSEQUENT YEARS, IS IT NOT JUST AND PROPER TO ALLOW CREDIT FOR THE TAXES HE PAID IN THE INITIAL YEARS?
THE INCOME TAX LAW IN INDIA HAS BECOME VERY COMPLEX AND THIS UNFORTUNATE STATE CONTINUES DESPITE PROMISES BY THE AUTHORITIES TO SIMPLIFY THE LAW FOR BETTER COMPLIANCE.THEREFORE IT IS VERY ESSENTIAL THAT WRITERS ARE BROUGHT INTO THE LIME LIGHT FOR EDUCATING MILLIONS OF IGNARANT TAX PAYERS IN INDIA.