Good morning, good evening, good afternoon to all of you
who are watching me right now.
I would like to extend my warmest greetings to all of you.
How are you all doing?
Is your life going well?
Is your scooter going well?
How are you all doing?
Till now, we have covered five heads of income.
We have also covered TDS, TCS, Advanced Tax.
Now, we have to cover a few small topics.
After that, you and I will be separated forever.
It is just a matter of a few days when you are tolerating
me.
After that, who knows where you and I will be.
Sir, there is a new topic.
It is a very amazing topic.
It is a very small topic.
It will be covered in a couple of lectures.
It won't take much time.
Set off and carry forward.
Carry forward.
Of what?
Of loss.
Carry forward of loss.
Set off and carry forward of the losses.
What is the matter?
What is the set off?
What is the carry forward?
Sir, it is a simple thing.
If you earn from a business, you pay your income tax on
that income.
But what about that case?
When you have a loss in your business, what about that case?
I have to discuss that.
When there is a loss, suppose there is a loss of 10 lakhs
in your business, what will you show to that 10 lakhs loss?
How will you show it?
Where? With what will you adjust it?
He talks about all these topics.
A person opens a business with a lot of hopes that
I will do this much in 2 years,
I will do this much in 5 years and in 10 years I will
become Gautam Adani.
But sir, not every business is successful.
All the start-ups that are opening, they are running in the
losses of crores of rupees.
Now what treatment to do for those losses, how to see, what
to do, we will discuss that in this topic.
But Bhairav, let's start a discussion.
I have a thought in my mind, I thought
I will talk a little, because now our lectures will also be
almost over.
Whatever experience I have, I want to share with you.
Sir, I want to talk to you about friendship.
What do you think, who is your best friend?
Rahul, Shubham, Vishal, Anjali, Neha, are they your best
friends?
Someone will say that my best friend is the one with whom I
sit and smoke.
Someone will say that my best friend is the one who taught
me to drink alcohol for the first time.
Someone will say that my best friend is the one who gets me
copied in the exam.
The one with whom I ride a motorcycle, he is my best friend.
Sir, he is not your best friend.
Your best friend is your mother and father.
They are your best friends, sir.
They never want anything bad for you.
Sometimes their words can be a little bitter, but their
intentions are always good for you.
You have a best friend in your house, your father.
He has so much experience.
The experience you go out to find, that much experience
that person actually has.
And you always ignore that experience.
Why? Whatever work you want to do, ask your father once,
what are the benefits and disadvantages of this?
If he gives you such knowledge, everyone will stand at your
feet.
Sir, always respect your father.
Everyone respects their mother.
But a father is the one who carries the burden of his house
on his shoulders.
No one respects him.
Your name is your father.
The surname you have got, you have got it from your father.
Always respect your father, sir.
He is your best friend.
Suppose you get a job, he will be the happiest.
You just got your first job, you didn't get a salary, he
will be the happiest.
Take a case, for example, you took your father to eat
samosas, he said, father, I got a job, it's only been 3-4
days,
I didn't get a salary.
Come, let's eat samosas, dhokla and jalebi.
This is Pappu Halwai.
Pappu Halwai is a very nice halwai.
We have a very old book of accounts here.
I used to come here with friends.
Now a new friend has recognized that my father is my friend.
Today, with a new friend, you have come to this shop to eat
samosas, jalebi and dhokla.
This is the case.
Now your job has just started, you didn't get a salary.
Your total bill has come, for example, of Rs.
Rs. 300, for example, your total bill has come.
First of all, tell me who is giving the treat.
Who is giving the treat?
Is your father giving it or are you giving it?
Sir, you are giving the treat because you have got a job.
So who will give the money, Rs.
You will give it.
But because you had got a new job, you took out your pocket
here and there and you got only Rs.
50 from your pocket.
You got only Rs. 50 from your pocket.
You made a payment of Rs. 50.
Sir, you have Rs. 250 left.
Now who will give the payment of Rs.
Where did you get Rs.
250 from?
You have seen your father with very mischievous and very
shy eyes.
Shy because you have come to give a treat and you don't
even have money.
And mischievous because you are so stupid that you have
come to give a treat and you don't even have money.
You looked at your father and because he is your father,
your father is always great.
Without seeing anything, he took out money from his pocket.
But the problem was that that day he trusted you that he
will have money.
So he also didn't bring much money from home and he only
brought Rs.
So he made a payment of Rs. 100 to the shopkeeper.
He made a payment of Rs.
100 to Pappu Halwai and this balance of Rs.
150 was left.
Sir, in this case, because I have told you that your old
account book used to run there.
Your old account book used to run there.
In that case, we explained the whole situation to Pappu
Halwai.
My father and I were also there.
I said that I made a payment of Rs.
50 to Pappu Halwai and my father made a payment of Rs.
Rs. 150 was left.
He said that this is such a good opportunity.
Sir, on such occasions, if you don't give me money today,
then it will be fine.
We also understand that there are such special days that we
remember for the rest of our lives.
Let's do one thing. Uncle has also come today.
So I will make a payment of Rs. 150 again.
Our old account book runs there.
I will make a payment of Rs. 150 again.
Don't give it today.
Make a payment the next time you come.
Make a payment a week later.
Sir, this is the concept of set-off and carry-forward of
losses.
This is the concept of set-off and carry-forward of losses.
It says that if you have a loss today, if you have a loss
today, then first of all, make an inter-source adjustment.
Inter-source adjustment.
It means that you have two businesses running.
You have two businesses running.
One is your petrol pump.
Second is your export house.
For example, I have an export house.
There is only one business.
Suppose I open a petrol pump.
Suppose I have a loss of Rs. 10 crores in a petrol pump.
And in the export house,
I have a profit of Rs. 12 crores.
So, this loss of Rs.
10 crores, first I will adjust it from the profit of Rs.
12 crores.
What will I call this?
Inter-source adjustment.
There is only one head of income.
What is the head of income? PGVP.
The head of income is business and profession.
There are two sources in that head.
One is the petrol pump.
The other is the export house.
One has a loss. The other has a profit.
Adjust it from this.
Inter-source adjustment.
In the same head, there were two different sources of
income.
One has a profit. One has a loss.
Adjust it from the loss.
Adjust it from the profit.
What is this? Inter-source adjustment.
Adjust it from the profit.
Adjust it from the head of income.
What is this?
Your father is giving you money.
You have run out of all the sources.
All the sources of the business head have run out.
Now, I will look for the other heads.
There is a loss of the business head.
I will look for the income of my house property.
Is there any income from my capital gains?
Is there any income from my other sources?
If there is, then adjust the remaining loss from there.
What will you call this?
You will call this inter-head adjustment.
Inter-head adjustment.
Look at it.
Despite this, let us first discuss about inter-head
adjustment.
Inter-head means that you have run out of all the sources.
PGBP was your income and you had two businesses, Export
House and another was Petrol Pump.
Assume that you have a loss of 20 crores in the pump and
you have a profit of 12 crores in Export House.
So, first adjust this loss of 20 crores.
After adjusting, your PGBP income is over.
12 crores has become 0 and still 8 crores is pending.
8 crores is pending. Now, what will you do? You go to other
sources.
You look at other head of income.
Is there any other head of income?
This PGBP has become inter-sourced in the head. Now, you
look for other head.
You see that there is income of other sources.
In other source, for example,
I have received an interest of 12 crores. So, I will
subtract 8 crores from 12 crores.
So, your total income of 4 crores is left.
Now, in your return file, your total income will be 4
crores.
Earlier, what was happening?
Profit of 12 crores, income of 12 crores here, income of 24
crores was going and loss of 20 crores was there.
So, what is the order? The order comes that first adjust
the loss of the business with the profit of the business.
Still, if some loss is left, then adjust the loss from
other head of income.
There is net income.
Tax will be imposed on that.
But what about this?
This 150 rupees is left.
Sir, even after this, if some loss is left, here the income
of 12 crores was there.
Suppose, if the income of 2 crores was there instead of 12
crores, then what would I do? Suppose, if the income of 2
crores was there, then what would I do? So, before 2
crores, 8 crores cannot be less.
Only 2 out of 2 would be less. Loss of 6 crores would have
been left.
Loss of 6 crores would have been left.
That 6 crores, I would have carried forward next year.
Now, next year, when my business income would have been
there,
I would have minused my old carry forward loss.
This is the basic concept of set-off and carry forward.
If you have any loss, first try to adjust that loss from
your side.
In the same head of income, if there is some other source
of income, try to adjust from there.
If it is well and good, if not, then move to another head.
Try to make an inter-head adjustment.
If it is well and good, if not, then the remaining loss
will be saved.
Next year, when your income will come, next year, when your
income will come, try to adjust from that.
But, which income should I do next year? Sir, next year, do
it from the income of this petrol pump.
Next year, don't do it from the income of this other source.
Next year, do it from this income.
In the next birth, you will be punished for your past bad
deeds.
Your siblings won't be punished.
If you have a loss in the previous birth, adjust it with
the profit of this birth.
Don't go to any other head of income.
Sir, this is the point.
This is the point.
Next year, you will be able to do inter-source only.
You won't be able to do inter-head adjustment, sir.
Have you seen the order?
How to do it? What to do?
Now, a point comes out that, for example, because there are
very crazy types of children.
Many children are raised.
There are some miraculous children.
Sir, what are these miraculous children?
What do miraculous children mean?
The definition of a miraculous child is that, a miraculous
child is one who does not do what is said.
Yes, he will definitely do what is not said.
So, a miraculous child asked me a question,
Sir, this is true that this is the first year.
Here, you have a loss.
You have done all the adjustments.
You have done the inter-source adjustment.
You couldn't complete it from there.
You have done the inter-head adjustment.
You couldn't complete it from there.
What will you do by losing and getting tired?
Will you carry it forward?
You will take it to the second year.
In the second year, when there will be a profit here, will
you minus this loss from it?
Will you minus this loss, sir?
Simple, till now, this is going on.
There is no problem till here.
Now, the question of that child is that, suppose, it
couldn't happen here also.
Here also, for example, there was a profit of one crore and
a loss of six crores.
So, minus five crores is left here also.
Now, where should I take this five crores?
Which soil should I dig and bury it?
What should I do with it?
Sir, in this case, the government says that, you can take
it forward for some years.
How many years are there?
In every case, in every head of income loss, different
heads have been specified by the government.
Different years have been specified.
So, for how many years, which loss can you take forward?
In which year, which loss can you take forward, sir?
One minute, let's check this.
After that, let's move ahead.
My answer to that miraculous child is this.
Come once on page number 18.
Let's read slowly.
See, for example, you have an unabsorbed depreciation.
We had studied unabsorbed depreciation in PGPP.
In PGPP, the depreciation that we could not use completely,
that year, it remains unabsorbed.
So, how far can I take the maximum period?
To the indefinite period.
This year, for example, there was a profit of 100 crores,
and a depreciation of 120 crores came out.
How much is the unabsorbed depreciation?
Minus 20.
20 crores is left.
Now, this 20 crores of mine, will I adjust it with the
profit of next year?
Suppose, I could not do it there, then I will do it next
year.
Suppose, I could not do it there, then I will do it next
year.
Till when will I do it?
Till the indefinite period.
Can I do it for 1500 years?
You can.
It is an indefinite period.
Your profit will keep decreasing.
See what it says.
And with which income can I adjust it?
Income against which the brought forward loss can be set up.
Income under any head other than salary.
Okay, tell me one thing.
You can have a loss in all heads.
You can have a loss in business.
You can have a loss in other sources as well.
You can have a loss in capital gain as well.
You bought some shares, and sold those shares at a loss.
It is possible, sir.
You bought a property, at a higher price.
There was some compulsion in the family.
I sold that property at a low price.
You can have a loss in capital gain as well.
Can you have a loss in salary?
Tell me.
Can you have a loss in salary?
In the head of salary.
Do you know the meaning of salary loss?
The meaning of salary loss is, wherever you go to work, you
pay for it.
You keep taking money from me every month.
And keep calling me to work.
Is it possible in practical life?
Forget about jokes.
Is it possible that every month, you don't get a salary,
but instead you pay for it?
What are you saying, sir?
There can never be a loss in salary.
Next.
There is an unabsorbed loss of house property.
For example, you have two houses.
One has a profit, and the other has a loss.
First, adjust the loss with the profit.
You will have an inter-source adjustment.
Then you will have an inter-head adjustment.
Even if there is an inter-head adjustment, there is no well
and good.
You will carry it forward next.
How long can you carry it forward?
What is he saying?
You can carry it forward for 8 years.
If this year is not good, then next year, next year, next
year.
Carry it for 8 years.
Even if you don't have a loss in the 8th year, what is our
fault in this?
What is the government's fault?
They have given you 8 years.
Earn money for 8 years.
You are not capable enough to generate profit in 8 years
and set off your loss.
What can I do in this?
They have given you 8 years.
They have given you so much time to earn profit and set off
your loss of house property.
Increase your rent.
Increase your income of house property.
If you don't want to do that, what can you do?
You can carry your loss of house property and set off your
loss of house property.
But remember, next year, your loss of house property will
be minused by the income of house property.
Next, unabsorbed business loss.
How will it be unabsorbed?
Profit in one business and loss in another.
First, adjust with the profit.
Next, move to another head.
If it is not possible there, then you will carry it forward.
How long will you carry it forward?
For 8 years.
When you carry it forward next year, adjust from the head
of profit and gain.
Don't adjust from house property, salary or capital gain.
Don't adjust.
This is the basic concept of next year.
When you carry it forward, the basic concept of carry
forward is that when you carry it forward, the head of
income the head of loss will be minused. head of income is
less, there is no inter head adjustment.
Next year if you start saying that there is a loss in
business, I am not able to complete it, so I will look at
it from the capital gain, I will go to other source, don't
do anything like that.
Next year, if there is a loss in your business, which you
carry forward, you have been doing it since this year, then
reducing the business income, looking at some other head of
income is also prohibited.
Because if you do some other head of income adjustment this
year, it will create a big loophole.
You will show so much loss of a business, that all your
head of income will be minus, this year's income will be
zero, then you will carry forward that loss, next year you
will make all the head's income zero.
It doesn't work like this.
Next year, only that head's income can be maximum zero,
whose loss it is.
Rest of the head of income, there will always be some
income, it will become your tax.
Government is not that stupid, that's why the crux comes
out that if you carry forward, then do adjustment from that
head of income only, don't do it on any other head.
Speculation business, there is a loss of speculation
business, you have played satta, you have played satta,
that rummy runs, online rummy, you are all playing online
rummy, don't play it, you will be ruined, you will give up
everything and make money.
Is there any loss of speculation business? So, income of
speculation business will go and you can set it off for 4
years.
Any specified business, do you remember specified business?
We had made that hotel of 2 star above category, hospital
above 100 beds, we had discussed in PGPP.
Is there any loss of specified business? So, profit from
the specified business only you will set it off for 4 years
and there is no time period for it, you have a loss of 1500
years, you can carry it forward till there, you can do it
for 1500 years.
There is no limit in this case.
There is capital loss, long term capital loss.
You had taken the property, today you bought it for 50
lakhs, you held it for 3-4-5 years, it became long term.
You had expected that it is a property of 50 lakhs and I
will sell it for 1 crore.
But there was an emergency situation in the house that you
had to sell the property in an emergency.
The property of 50 lakhs was sold for 45 lakhs.
Long term capital loss of 5 lakhs was there.
In that case, you will reduce it with long term capital
gain and you will reduce it for 8 years.
Short term capital loss, you can reduce it with short term
capital gain and you can reduce it with long term capital
gain and you will do it for 8 years.
How is our next? Owning and maintaining racehorses.
You maintain racehorses.
Income from the activity of owning and maintaining
racehorses will be reduced.
It will be reduced for 4 years.
These are the points.
How to set off? What to set off? These were the points.
Look at the order of set off.
How to do it?
If the profit of your business comes out, then first of
all, the depreciation of this year, reduce that
depreciation of this year.
After that, if there is any broad forward loss, the carry
forward loss of last year, reduce that.
After that, unabsorbed depreciation.
Why am I saying this? Try to understand the logic of this.
You will never be able to remember this thing.
Why am I saying this? Try to understand.
I am saying that, first of all, your net profit came out.
From the net profit, you will reduce the depreciation of
that year, current year depreciation.
You will definitely reduce this.
After that, I am saying, reduce the business loss which you
have carried forward from last year.
Why am I reducing the business loss first? Sir, I am
reducing the business loss because its limit is 8 years.
I cannot take it beyond 8 years.
Whatever the loss is, should I reduce the loss first?
Unabsorbed depreciation is for indefinite period.
If it is not completed this year, then I will do it in next
year.
If it is not completed in next year, then I will do it in
next year.
But this has a limit of 8 years.
After 8 years, it will become zero.
Even if there is a loss of 1000 crores, after 8 years, it
will become zero.
Now, understand what is my concern.
I have an income of 500 crores here. As an example, I have
an income of 500 crores.
And last year, there was a loss of 1000 crores.
Should I pay tax on an income of 500 crores?
What will be my objective? I will show the minimum income.
So, I will reduce the loss of 1000 crores by 500 crores.
This year, my income will become zero.
Zero tax will be imposed.
And the balance which is 500 crores, I will take it here.
I am adjusting the loss.
Ultimately, what is the benefit for me? The benefit for me
is that the income of my existing income is getting reduced.
My income tax is getting reduced.
But the government knows that a person can cheat in this.
That is why the government has given you a provision of 8
years.
That you can only do this thing for 8 years.
So, first of all, I will have to reduce my loss.
After that, I will reduce the depreciation which is
unabsorbed, which
I can take for as many years as I want. People get confused
in this order.
These are very good provisions. Film makers use this a lot.
You must have seen it sometime.
Films are made with such heroes, who know by watching the
trailer that the movie will flop.
Let's take Neel Nitin Mukesh as a hero in the movie.
Who is he? Is he Vashu
Bhagnani? What is the name of that boy? Jackie Bhagnani.
Let's take him as a hero in the movie.
Let's show the budget of the movie of 50 crores.
And when you sit to watch the movie of 50 crores, you will
see that the movie is not even made in 25 lakhs.
There is a shooting of Gaon Gurbe and the budget is of 50
crores.
They do the same thing.
They show the loss of 50 crores and adjust that loss with
the income of a movie where there was a profit.
From there, they make the income zero.
Their business income becomes zero.
There are a lot of dramas in the film line.
They show the loss of one
film and adjust it with the profit of the other film.
Even if there is a super hit, they adjust the loss.
The income becomes less.
The income becomes less or the income becomes zero.
The income tax also becomes zero.
They are all very smart.
These are the points.
Inter-source adjustment.
We just read that how they are adjusting.
Inter-source adjustment is done.
Inter-head adjustment is done.
Carry forward of the losses is done.
Thank you friends.