what is set off and carry forward.

Question Posted / hussain

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what is set off and carry forward...

Answer / ajay

set off is related to taxes.for i.e. vat tax

if vat output is higher than vat input than we have to pay
the excess vat payment which we get after subtracting vat
output with vat input.
vat output-3000/-
vat input-1500/-
---------------
payble amount 1500/-(it is the amount which is due after
sett off)
if input is higher than output than excess of output is
carried forward.i.e.
vat input- 3000/-
vat output-1500/-
----------------
vat carried forward - 1500/-(it is the amount which is
carried forward)

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what is set off and carry forward...

Answer / vivek anand

1:::::---set off and carry forward comes under taxation. i
vl take an eg.to explane set off-- mr.a has got 2 business
one is cloth shop and another is coffee shop...at the end
of d year...owner faced a loss of 50000 from cloth shop and
profit of 60000 from coffee shop.(60000-50000) therefore
the owner is only liable to pay tax on 10000 rs because
according to income tax act. his loss should be recovered
from his profit.
note:- both the business should come under one head..
2:::::---carry forward ---taking same senario if mr.a faced
a loss of 100000 and profit 0f 30000 ...den his profit
amount will be adjusted to his loss amount and he will not
be liable to pay any tax...whereas (100000-30000) leftover
amount vl be again adjusted to next year profit....if he
coundnt recover his loss amount next year...d maximum time
he can take is 8 years..