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Income Tax Act, 1967.

Determination of terminal loss.

312.—(1) The question whether a person has sustained any, and if so what, terminal loss in a trade or profession shall for the purposes of section 311 be determined by taking the amounts, if any, of the following (in so far as they have not been otherwise taken into account so as to reduce or relieve any charge to tax), that is to say:

(a) the loss sustained by him in the trade or profession in the year of assessment in which it is permanently discontinued;

(b) the relevant capital allowances for that year of assessment;

(c) the loss sustained by him in the trade or profession in the part of the preceding year of assessment beginning twelve months before the date of the discontinuance;

(d) the same fraction of the relevant capital allowances for that preceding year of assessment as the part beginning as aforesaid is of a year.

(2) In subsection (1), “the relevant capital allowances” means, in relation to any year of assessment, the capital allowances falling to be made in charging the profits or gains of the trade or profession for that year excluding amounts carried forward from an earlier year, and, for the purposes of subsection (1)(a)(c), the amount of a loss shall be computed in like manner as profits or gains are computed under the provisions of this Act applicable to Cases I and II of Schedule D.