Hello. I can tell you what is negative income tax. Negative income tax refers to a tax rebate for negative income and isn’t applicable to salaried taxpayers. The negative provision comes into play when a taxpayer makes a loss in a fiscal year. In case a salaried taxpayer doesn’t earn any income in a financial year, his tax liability becomes zero and he becomes eligible for a nil tax return. I will share more below.
Working of Negative Income Tax
Perople can earn income from several sources, including stocks, equity, real estate, etc. With this comes a significant chance of making losses. In such a scenario, people need to book losses and file a loss in their IT return.
The IT department has a provision under Section 139(3) that allows the trader to cary forward their loss to the next year and set it off by profits. So, to simplify, if you have incurred a loss of Rs. 3 lakhs in the financial year 23-24, you have the provision to carry it forward to the next year.
In the next FY year (2024-25), if you make a profit of say Rs. 3 lakhs, you will not be liable to pay tax on it as it will set off your last year’s losses.
This is all I have to share with you. I hope it helps understand the negative income tax meaning.
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What is Negative Income Tax?
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10 months
2025-01-31T17:31:43+00:00 2025-01-31T17:31:44+00:00Comment
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