If after intra head or inter head setoff,still some loss remains.It can be carry forward to next period to be adjusted with next years income
This is called carry forward and setoff
If a person has 2 business,In first business there is profit of 200000 and in second ,there is loss of 270000,
Loss upto 200000 can be setoff against profit.
Remaining loss of 70000 can be carry forward to next period
Suppose in Example 1 there is profit of 300000 and 50000 next year
Total profit of next year=800000
Loss of previous period of 70000 can be setoff against it
Profit taxable for next year=800000-70000=Rs 630000
Carry forward & set off
It means Adjusting loss with profit
It means carrying forward loss to next period
then adjusting it with future period income
Not all loss are allowed to be adjusted with each other.
There are various restrictions on intrahead setoff,interhead setoff as well as carryforward
Lets study these losses one by one