ISLAMABAD: Hotel business has been allowed to carry forward loss for a period of eight years from the tax year starting from July 01, 2020.
The amendment has been introduced through Finance Act, 2020, which was recently approved by the National Assembly.
A new sub-section 2B of Section 57 to Income Tax Ordinance, 2001.
The new sub-section is as:
Sub-section 2B: Where a loss, referred to in sub-section (2), relating to a tax year commencing on or after the first day of July 2020 is sustained by a resident company engaged in the hotel business in Pakistan, the said loss shall be carried forward for a period of eight years.”
The sub-section of the Section 57 before the amendment is read as:
(2) If a loss sustained by a person for a tax year under the head “Income from Business” is not wholly set off under sub-section (1), then the amount of the loss not set off shall be carried forward to the following tax year and applied as specified in sub-section (1) in that year, and so on, but no loss can be carried forward to more than six tax years immediately succeeding the tax year for which the loss was first computed.
(2A) Where a loss, referred to in sub-section (2), relating to any assessment year commencing on or after 1stday of July, 1995, and ending on the 30thday of June 2001, is sustained by a banking company wholly owned by the Federal Government as on first day of June, 2002, which is approved by the State Bank of Pakistan for the purpose of this sub-section, the said loss shall be carried forward for a period of ten years.