Taxation - DT Ch 11: Return Filing - Test 1: answer key

Question 1 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. Vikramaditya Tech Labs LLP is a limited liability partnership firm engaged in providing software consultancy services. It is registered under the LLP Act, 2008 and has its principal place of business in Pune, Maharashtra. For the financial year 2026-27, the LLP's total gross receipts from professional services amounted to ₹ 42,00,000. The firm does not maintain books of account that are required to undergo statutory audit under the Income-tax Act, 1961 or any other law. The designated partner, Mr. Vikram Aditya, is a resident individual aged 48 years. During the year, the LLP deposited ₹ 1,15,00,000 in its current account maintained with a scheduled commercial bank in Pune. The firm also incurred ₹ 2,40,000 on foreign travel of its two partners to Singapore for a business conference. Additionally, the LLP earned interest income of ₹ 85,000 from a fixed deposit with a bank. The firm has no income under the head 'Capital Gains' or 'Profits and Gains of Business or Profession' other than the professional receipts mentioned above. The LLP wants to file its return of income for the assessment year 2027-28 within the prescribed due date. The partners are confused about the applicable due date and whether the firm is mandatorily required to file a return under Section 139(1) even if its total income is below the basic exemption limit. The firm also suffered a loss of ₹ 3,50,000 from its professional practice during the year, which it wishes to carry forward to the next assessment year. Mr. Vikram seeks your advice on the due date for filing the return, the applicability of the Seventh Proviso to Section 139(1), and the requirements for carrying forward the business loss.

What is the due date for Vikramaditya Tech Labs LLP to furnish its return of income for the assessment year 2027-28 under Section 139(1)?

1. 31st July, 2027
2. 31st October, 2027
3. 31st August, 2027 (correct answer)
4. 30th November, 2027

Answer: C — 31st August, 2027

Explanation. For the assessment year 2027-28, Explanation 2 to Section 139(1) as substituted by the Finance Act, 2026 prescribes the due date. The LLP has income from profits and gains of business or profession (professional receipts of ₹ 42,00,000) and its accounts are not required to undergo statutory audit. Therefore, the due date is 31st August, 2027. The 31st July date applies only to assessees having no income under the head 'Profits and Gains of Business or Profession'. The 31st October date applies to companies and assessees whose accounts are required to undergo statutory audit. The 30th November date applies to transfer pricing cases under Section 92E.

Where it goes wrong. Students often assume 31st July is the universal due date for non-audit cases, ignoring the Finance Act, 2026 amendment that created a separate 31st August due date for non-audit business/profession filers.

Authority. Section 139(1), Explanation 2, Income-tax Act, 1961

Question 2 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Does the Seventh Proviso to Section 139(1) mandatorily require Vikramaditya Tech Labs LLP to furnish a return of income for the assessment year 2027-28, even if its total income is below the basic exemption limit?

1. No, because the Seventh Proviso applies only to individuals and HUFs, not to LLPs. (correct answer)
2. Yes, because the LLP deposited ₹ 1,15,00,000 in its current account, exceeding the ₹ 1 crore threshold.
3. No, because the aggregate current account deposits of ₹ 1,15,00,000 do not exceed the threshold of ₹ 1 crore when considered on a net basis after withdrawals.
4. Yes, because the LLP incurred foreign travel expenditure of ₹ 2,40,000, which exceeds the ₹ 2 lakh threshold.

Answer: A — No, because the Seventh Proviso applies only to individuals and HUFs, not to LLPs.

Explanation. The Seventh Proviso to Section 139(1) applies to a 'person referred to in clause (b)' of that sub-section, which covers individuals, HUFs, AOPs, BOIs, and artificial juridical persons, but not companies or firms (including LLPs). The proviso lists conditions such as current account deposits exceeding ₹ 1 crore, foreign travel expenditure exceeding ₹ 2 lakh, and electricity consumption exceeding ₹ 1 lakh. Since Vikramaditya Tech Labs LLP is a firm, the Seventh Proviso does not apply to it. The LLP's obligation to file a return depends on the main provisions of Section 139(1), including the loss return requirement under Section 139(3).

Where it goes wrong. The monetary thresholds in the Seventh Proviso are designed to catch individuals and HUFs; students often wrongly extend them to firms and companies because the figures appear substantial.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 3 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Vikramaditya Tech Labs LLP suffered a loss of ₹ 3,50,000 from its professional practice during the financial year 2026-27. Which of the following statements is correct regarding the carry forward of this loss?

1. The loss can be carried forward even if the return is filed after the due date, because business loss is not subject to the timeliness condition.
2. The loss cannot be carried forward because the LLP's total income is below the basic exemption limit.
3. The loss can be carried forward only if the return is furnished on or before the due date specified under Section 139(1). (correct answer)
4. The loss can be carried forward for a maximum of four assessment years, irrespective of the date of filing the return.

Answer: C — The loss can be carried forward only if the return is furnished on or before the due date specified under Section 139(1).

Explanation. Section 139(3) requires that a return of loss under the head 'Profits and Gains of Business or Profession' must be furnished on or before the due date specified under Section 139(1) to enable the assessee to carry forward the loss under Section 72(1). The LLP's due date is 31st August, 2027. If the return is filed after this date, the business loss cannot be carried forward. The basic exemption limit is irrelevant for loss carry forward. The maximum carry forward period for business loss is eight assessment years, not four.

Where it goes wrong. Students sometimes believe that business loss can be carried forward even if the return is belated, but Section 139(3) makes timely filing a condition precedent for carry forward of business and capital losses.

Authority. Section 139(3), Section 72(1), Income-tax Act, 1961

Question 4 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

The LLP also earned interest income of ₹ 85,000 from a fixed deposit. How does this affect the applicability of the Seventh Proviso to Section 139(1) for the LLP?

1. The interest income is irrelevant because the Seventh Proviso does not apply to LLPs at all. (correct answer)
2. The interest income pushes the total income above the basic exemption limit, making return filing mandatory under the main provision.
3. The interest income must be aggregated with business receipts to determine whether the ₹ 1 crore current account threshold is breached.
4. The interest income is exempt under Section 10(15), so it cannot trigger the Seventh Proviso.

Answer: A — The interest income is irrelevant because the Seventh Proviso does not apply to LLPs at all.

Explanation. As established in the earlier question, the Seventh Proviso to Section 139(1) does not apply to firms or LLPs. It applies to individuals, HUFs, AOPs, BOIs, and artificial juridical persons. Therefore, the interest income of ₹ 85,000 does not trigger the Seventh Proviso for the LLP. The LLP's return filing obligation arises under the main provisions of Section 139(1) and Section 139(3). The interest income is taxable under 'Income from Other Sources' and will be included in the total income, but it does not alter the inapplicability of the Seventh Proviso.

Where it goes wrong. Even though the interest income is taxable, students may incorrectly try to apply the Seventh Proviso thresholds to the LLP because the income is below the exemption limit, forgetting the proviso is entity-specific.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 5 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. Nandini Real Estates Pvt Ltd is an Indian company incorporated under the Companies Act, 2013, with its registered office in Bengaluru, Karnataka. The company is engaged in the business of construction and sale of residential apartments. For the financial year 2026-27, the company's total turnover was ₹ 18,50,00,000. The company has a subsidiary in Singapore and during the year entered into international transactions with its associated enterprise aggregating to ₹ 4,20,00,000. The company is required to furnish a report from an accountant under Section 92E of the Income-tax Act, 1961 in respect of these international transactions. The company's accounts are subject to audit under the Companies Act, 2013 and also under Section 44AB of the Income-tax Act, 1961. The company suffered a loss of ₹ 12,00,000 under the head 'Profits and Gains of Business or Profession' and a long-term capital loss of ₹ 5,00,000 on sale of listed equity shares (STT paid). The company wants to carry forward these losses. The company also deposited ₹ 1,50,00,000 in its current account with a co-operative bank during the year. The directors of the company are unsure about the precise due date for filing the return of income for the assessment year 2027-28, as they have heard about different dates such as 31st July, 31st August, 31st October, and 30th November. They also want to know whether the Seventh Proviso to Section 139(1) applies to a company. The company has not filed its return of income for the previous year 2025-26 within the due date and now wishes to file a belated return for that year as well.

What is the due date for Nandini Real Estates Pvt Ltd to furnish its return of income for the assessment year 2027-28?

1. 31st July, 2027
2. 31st August, 2027
3. 31st October, 2027
4. 30th November, 2027 (correct answer)

Answer: D — 30th November, 2027

Explanation. Nandini Real Estates Pvt Ltd is a company and has entered into international transactions with an associated enterprise, requiring a report under Section 92E. Under Explanation 2 to Section 139(1), as substituted by the Finance Act, 2026, the due date for an assessee required to furnish a report under Section 92E is 30th November of the assessment year. The 31st October date applies to companies and audit cases generally, but the specific transfer pricing provision overrides it. The 31st July and 31st August dates apply to non-audit individuals and entities.

Where it goes wrong. Students often select 31st October because the company is subject to audit, but they miss the specific extension to 30th November for transfer pricing cases under Section 92E.

Authority. Section 139(1), Explanation 2, Income-tax Act, 1961

Question 6 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Nandini Real Estates Pvt Ltd suffered a long-term capital loss of ₹ 5,00,000 on sale of listed equity shares (STT paid). Can the company carry forward this loss if it files its return of income on 30th November, 2027?

1. Yes, because the due date for the company is 30th November, 2027, and the return is filed within that date. (correct answer)
2. No, because the due date for the company is 31st October, 2027, and the return is belated.
3. Yes, because capital losses can be carried forward even if the return is filed after the due date.
4. No, because long-term capital losses on listed equity shares are not eligible for carry forward under any circumstances.

Answer: A — Yes, because the due date for the company is 30th November, 2027, and the return is filed within that date.

Explanation. The due date for Nandini Real Estates Pvt Ltd is 30th November, 2027, because it is required to furnish a report under Section 92E. Since the company files its return on the due date, it satisfies the condition in Section 139(3). A long-term capital loss can be carried forward under Section 74(1) if the return of loss is filed within the time allowed under Section 139(1). The fact that the loss arises from listed equity shares with STT paid does not disqualify it from carry forward. Therefore, the company can carry forward the loss.

Where it goes wrong. The interplay between the Section 92E due date and Section 139(3) is often missed; students may incorrectly apply the 31st October date and conclude the return is belated.

Authority. Section 139(3), Section 74(1), Income-tax Act, 1961

Question 7 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

The company deposited ₹ 1,50,00,000 in its current account with a co-operative bank during the financial year 2026-27. Does this trigger a mandatory return filing obligation for the company under the Seventh Proviso to Section 139(1)?

1. Yes, because the deposit exceeds ₹ 1 crore, and the Seventh Proviso applies to all persons, including companies.
2. Yes, but only if the company's total income exceeds the basic exemption limit.
3. No, because the Seventh Proviso applies only to individuals and HUFs, not to companies. (correct answer)
4. No, because the deposit is with a co-operative bank, and the Seventh Proviso covers only deposits with a banking company.

Answer: C — No, because the Seventh Proviso applies only to individuals and HUFs, not to companies.

Explanation. The Seventh Proviso to Section 139(1) applies to a 'person referred to in clause (b)' of that sub-section, which covers individuals, HUFs, AOPs, BOIs, and artificial juridical persons, but excludes companies and firms. Therefore, the ₹ 1,50,00,000 deposit in the current account does not trigger the Seventh Proviso for Nandini Real Estates Pvt Ltd. The company's obligation to file a return arises under the main provisions of Section 139(1) because it is a company. The proviso's thresholds are irrelevant for companies.

Where it goes wrong. Students often extend the Seventh Proviso to companies because the monetary threshold appears significant, but the proviso is expressly limited to non-corporate assessees.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 8 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Nandini Real Estates Pvt Ltd did not file its return of income for the previous year 2025-26 (assessment year 2026-27) within the due date. It now wishes to file a belated return for that year. What is the last date for filing such a belated return under Section 139(4)?

1. 31st March, 2027
2. 31st December, 2027
3. 31st March, 2028
4. 31st December, 2026 (correct answer)

Answer: D — 31st December, 2026

Explanation. Under Section 139(4), a belated return for a previous year can be furnished at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. For the assessment year 2026-27, the relevant assessment year ends on 31st March, 2027. One year from the end of the assessment year is 31st March, 2028. However, the Finance Act, 2026 has amended the belated return timeline. For assessment year 2026-27, the last date for filing a belated return is 31st December, 2026. The 31st December date is the operative deadline.

Where it goes wrong. Students may apply the general 'one year from the end of the assessment year' rule and choose 31st March, 2028, ignoring the specific amendment that shortened the belated return window.

Authority. Section 139(4), Income-tax Act, 1961

Question 9 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Rohan, a resident individual aged 35 years, has income from salary and house property. His total income for the assessment year 2027-28 is ₹ 2,30,000. He deposited ₹ 1,05,00,000 in his current account during the financial year 2026-27. Is he required to furnish a return of income under Section 139(1)?

1. No, because his total income is below the basic exemption limit of ₹ 2,50,000.
2. Yes, but only if he has incurred foreign travel expenditure exceeding ₹ 2 lakh.
3. No, because the Seventh Proviso applies only if the total income exceeds the basic exemption limit.
4. Yes, because the current account deposit exceeds ₹ 1 crore, triggering the Seventh Proviso. (correct answer)

Answer: D — Yes, because the current account deposit exceeds ₹ 1 crore, triggering the Seventh Proviso.

Explanation. The Seventh Proviso to Section 139(1) mandates return filing for a person otherwise not required to file, if during the previous year the person has deposited an amount or aggregate of amounts exceeding ₹ 1 crore in one or more current accounts. Mr. Rohan deposited ₹ 1,05,00,000, which exceeds the threshold. The proviso applies irrespective of whether the total income exceeds the basic exemption limit. Therefore, he must furnish a return of income. The foreign travel condition is an alternative trigger, not a prerequisite.

Where it goes wrong. Students often think the Seventh Proviso applies only when income exceeds the basic exemption limit, but the proviso is an independent obligation based on specified high-value transactions.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 10 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Smt. Anuradha Sen, a resident individual aged 62 years, has a total income of ₹ 3,20,000 for the assessment year 2027-28. She incurred ₹ 2,10,000 on foreign travel for herself and her spouse to Europe. She also deposited ₹ 95,00,000 in her savings bank account during the year. Which of the following statements is correct regarding her obligation to file a return of income?

1. She is not required to file a return because her total income is below the basic exemption limit of ₹ 3,00,000 for senior citizens.
2. She is required to file a return only because her foreign travel expenditure exceeds ₹ 2 lakh. (correct answer)
3. She is required to file a return because both the foreign travel expenditure and the savings bank deposit conditions are satisfied.
4. She is not required to file a return because the Seventh Proviso does not apply to senior citizens.

Answer: B — She is required to file a return only because her foreign travel expenditure exceeds ₹ 2 lakh.

Explanation. Under the Seventh Proviso to Section 139(1), return filing is mandatory if the person incurs foreign travel expenditure exceeding ₹ 2 lakh. Smt. Anuradha incurred ₹ 2,10,000, which exceeds the threshold. The savings bank deposit threshold under the Seventh Proviso is ₹ 50 lakh, and her deposit of ₹ 95,00,000 does not meet this condition. However, the foreign travel condition alone is sufficient to trigger the obligation. The basic exemption limit for a resident individual aged 60 years or more is ₹ 3,00,000, but the Seventh Proviso overrides this if the specified conditions are met.

Where it goes wrong. Students may focus on the savings bank deposit amount and incorrectly conclude that the ₹ 50 lakh threshold is not met, while overlooking the foreign travel expenditure which independently triggers the requirement.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 11 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Aryan Steels Ltd, a domestic company, has a total turnover of ₹ 8,50,00,000 for the financial year 2026-27. Its accounts are not required to undergo statutory audit under the Companies Act, 2013 or under Section 44AB of the Income-tax Act, 1961. What is the due date for filing its return of income for the assessment year 2027-28?

1. 31st July, 2027
2. 31st August, 2027
3. 31st October, 2027 (correct answer)
4. 30th November, 2027

Answer: C — 31st October, 2027

Explanation. Under Explanation 2 to Section 139(1), the due date for a company is 31st October of the assessment year. This due date applies to all companies, irrespective of whether their accounts are required to undergo statutory audit under the Companies Act or Section 44AB. The Finance Act, 2026 amendment introduced the 31st August date for non-audit business/profession filers, but that does not apply to companies. The 30th November date applies only to transfer pricing cases under Section 92E.

Where it goes wrong. Students may think that if a company's accounts are not subject to audit, the 31st August date applies, but the 31st August date is only for non-corporate assessees with business income whose accounts are not statutorily examined.

Authority. Section 139(1), Explanation 2, Income-tax Act, 1961

Question 12 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Karthik, a resident individual aged 45 years, has income from business and profession. His accounts are not required to undergo statutory audit under Section 44AB. He also has income from salary and house property. His total income for the assessment year 2027-28 is ₹ 6,50,000. What is the due date for filing his return of income?

1. 31st July, 2027
2. 31st August, 2027 (correct answer)
3. 31st October, 2027
4. 30th November, 2027

Answer: B — 31st August, 2027

Explanation. Mr. Karthik has income under the head 'Profits and Gains of Business or Profession', and his accounts are not required to undergo statutory audit. Under Explanation 2 to Section 139(1) as amended by the Finance Act, 2026, the due date for such an assessee is 31st August of the assessment year. The presence of salary and house property income does not change the due date, because the determining factor is the business income and the non-audit status. The 31st July date applies only to assessees having no business or profession income.

Where it goes wrong. Students often pick 31st July because the individual also has salary income, but the due date is determined by the highest applicable category, which here is non-audit business income (31st August).

Authority. Section 139(1), Explanation 2, Income-tax Act, 1961

Question 13 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Ms. Meera, a resident individual aged 30 years, has total income of ₹ 2,20,000 from salary. She incurred ₹ 1,10,000 on electricity consumption for her residence during the financial year 2026-27. She also deposited ₹ 40,00,000 in her savings bank account. Is she required to file a return of income under Section 139(1)?

1. No, because her total income is below the basic exemption limit and neither the electricity nor the savings bank thresholds are breached.
2. Yes, because the electricity consumption exceeds ₹ 1 lakh, triggering the Seventh Proviso. (correct answer)
3. Yes, because the savings bank deposit exceeds ₹ 50 lakh.
4. No, because the Seventh Proviso applies only to male taxpayers.

Answer: B — Yes, because the electricity consumption exceeds ₹ 1 lakh, triggering the Seventh Proviso.

Explanation. Under the Seventh Proviso to Section 139(1), return filing is mandatory if the person incurs expenditure exceeding ₹ 1 lakh towards consumption of electricity. Ms. Meera incurred ₹ 1,10,000, which exceeds the threshold. The savings bank deposit threshold is ₹ 50 lakh, and her deposit of ₹ 40,00,000 does not breach it. The basic exemption limit is irrelevant once a Seventh Proviso condition is satisfied. The proviso applies to all individuals irrespective of gender.

Where it goes wrong. Students may incorrectly focus on the savings bank deposit amount (₹ 40 lakh) and conclude it is below the ₹ 50 lakh threshold, while missing the electricity expenditure condition that independently triggers the obligation.

Authority. Seventh Proviso to Section 139(1), Income-tax Act, 1961

Question 14 · 2 marks · Taxation - DT Ch 11: Return Filing · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

XYZ LLP, a limited liability partnership, has a business loss of ₹ 8,00,000 for the financial year 2026-27. It files its return of income on 15th December, 2027. The due date for filing the return was 31st August, 2027. Which of the following statements is correct?

1. The LLP can carry forward the business loss because it filed the return before 31st December, 2027.
2. The LLP cannot carry forward the business loss because the return was filed after the due date under Section 139(1). (correct answer)
3. The LLP can carry forward the business loss because the loss is less than ₹ 10,00,000.
4. The LLP cannot carry forward the business loss because LLPs are not eligible to carry forward losses.

Answer: B — The LLP cannot carry forward the business loss because the return was filed after the due date under Section 139(1).

Explanation. Section 139(3) mandates that a return of loss must be furnished on or before the due date specified under Section 139(1) to enable carry forward of business loss under Section 72(1). The due date for the LLP was 31st August, 2027. Since the return was filed on 15th December, 2027, it is belated, and the business loss cannot be carried forward. The monetary amount of the loss is irrelevant. LLPs are eligible to carry forward losses if the return is timely filed.

Where it goes wrong. Students may confuse the belated return deadline (31st December) with the loss return deadline (due date under Section 139(1)), incorrectly assuming the loss can be carried forward if filed by 31st December.

Authority. Section 139(3), Section 72(1), Income-tax Act, 1961

Question 15 · 2 marks · Taxation - DT Ch 11: Return Filing · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Arvind, a resident individual aged 50 years, has income from salary of ₹ 4,00,000. He also has a long-term capital loss of ₹ 1,50,000 on sale of listed equity shares (STT paid) and a short-term capital loss of ₹ 50,000 on sale of other assets. He files his return of income on 31st July, 2027. What is the consequence of this filing date for the carry forward of his capital losses?

1. Both the long-term and short-term capital losses can be carried forward because the return is filed within the due date. (correct answer)
2. Only the long-term capital loss can be carried forward because the return is filed after the due date for capital loss returns.
3. Neither the long-term nor the short-term capital loss can be carried forward because the return is filed after the due date under Section 139(1).
4. The losses can be carried forward because capital losses are exempt from the timeliness condition under Section 139(3).

Answer: A — Both the long-term and short-term capital losses can be carried forward because the return is filed within the due date.

Explanation. Mr. Arvind has only salary income, so his due date under Section 139(1) is 31st July of the assessment year. He files his return on 31st July, 2027, which is within the due date. Section 139(3) requires a return of loss to be filed within the due date under Section 139(1) to carry forward capital losses under Section 74. Since the return is timely, both the long-term and short-term capital losses can be carried forward. The fact that the long-term loss arises from STT-paid equity shares does not disqualify it from carry forward.

Where it goes wrong. Students may think the due date for capital loss cases is different or that STT-paid equity losses cannot be carried forward, but the due date is the same as the general due date for the assessee, and capital losses (including STT-paid) can be carried forward if the return is timely.

Authority. Section 139(3), Section 74, Income-tax Act, 1961