Eligibility for Carry Forward

• Yes, capital losses can be carried forward under corporate tax provisions.
  
• This includes both short-term and long-term capital losses.
  
• Losses must be declared in the income tax return filed within the due date.
  
• The company must maintain proper computation of such losses.
  
• Losses not disclosed on time cannot be carried forward.
  

Short-Term Capital Losses

• Can be carried forward for up to 8 assessment years.
  
• Can be set off against both short-term and long-term capital gains.
  
• Losses must be reported in the capital gains schedule of the tax return.
  
• Losses arising from sale of depreciable assets under block of assets are not included.
  
• Unadjusted losses can be accumulated year to year within the allowed limit.
  

Long-Term Capital Losses

• Also allowed to be carried forward for up to 8 assessment years.
  
• Can be set off only against long-term capital gains.
  
• Cannot be adjusted against short-term capital gains or other income.
  
• Proper classification between short-term and long-term is essential.
  
• Transactions must be supported by sale documents and computation.
  

Filing and Documentation Requirements

• The return must be filed under section 139(1) within the statutory due date.
  
• Companies must retain sale contracts, investment records, and proof of payment.
  
• Relevant schedules in Form ITR-6 must reflect the carried forward losses.
  
• These losses must also be acknowledged in assessments, if applicable.
  
• Losses cannot be revised or carried forward if the return is belated.
  

Restrictions and Conditions

• Losses from exempt income transactions (like listed shares under tax-exempt gains) cannot be carried forward.
  
• Intra-group transfer losses may be disallowed under anti-abuse provisions.
  
• Capital losses are not eligible for carry forward if disallowed by tax authorities.
  
• Proper separation from business income and depreciation must be ensured.
  
• Any incorrect claim may lead to disallowance or penalty during assessment.