Finance Act, 1995

Short-lived businesses.

19.—As respects the year 1995-96 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended by the insertion after section 58 of the following section:

“58A.—(1) This section applies to a trade or profession which has been set up and commenced in a year of assessment and which is permanently discontinued within the second year of assessment following that year of assessment and in respect of which the aggregate of the profits or gains on which any person has been charged, or would be charged to income tax, by virtue of any other provision of this Act, exceeds the aggregate of the profits or gains arising in the period beginning on the date of set up and commencement and ending on the date of permanent discontinuance of the trade or profession.

(2) Any person chargeable to income tax on the profits or gains of a trade or profession to which this section applies shall be entitled, on giving notice in writing to the inspector on or before the specified return date (within the meaning of section 9 of the Finance Act, 1988 ) for the year of assessment in which the trade or profession is permanently discontinued, to have the assessment for the year of assessment immediately preceding that year reduced by the amount by which the amount of the assessment for that immediately preceding year exceeds the full amount of the profits or gains arising in that same year.

(3) The provisions of subsection (6) of section 58 of the Income Tax Act, 1967 , shall apply to this section as if references therein to subsection (5) included references to this section.”.