In this article, we will discuss what are the provisions relating to carry forward as well as set off of losses from owning and maintaining race-horses u/s 74A(3).
Provisions relating to set off of losses from owning and maintaining race horses u/s 74 A (3)
The provisions relating to carry forward and set off of losses from the activity of owning and maintaining race-horses are as follows:
| (a) Any loss from the activity of owning and maintaining race-horses in any assessment year shall be set off only against any income from the said activity in the same assessment year. |
| (b) Unadjusted loss, if any, shall be carried forward for set off against any income from the activity of owning and maintaining race-horses. |
| (c) Carry forward is permissible for a maximum period of 4 assessment years immediately succeeding the assessment year for which the loss was first computed. |
| (d) Brought forward loss can be set off if the activity of owning and maintaining race-horses is carried on by the assessee in the previous year in which such loss is sought to be set off. |
| (e) Submission of return of loss is mandatory to enjoy the benefit of set off of such loss [Sec. 80]. |
The above provisions are applicable if the loss arises from the activity of owning and maintaining race horses (and not from the activity of owning and maintaining any other race-animals).
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Provisions relating to set off of losses from owning and maintaining race horses u/s 74 A (3)
‘Loss from the activity of owning and maintaining race-horses’ – Meaning [section 74A(3)]:
Loss from the activity of owning and maintaining race-horses means-
(i) in a case where the assessee has no income by way of stake money, the amount of revenue expenditure laid out or expended by him wholly and exclusively for the purpose of maintain race horses;
(ii) in a case where the assessee has income by way of stake money, the amount by which such income falls short of the amount of revenue expenditure laid out or expended by the assessee wholly and exclusively for the purpose of maintaining race-horses.
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