IITR.311048 states that where the Type of Loss of either '6' or '7' has been selected in Business loss activity details, the sum of Taxable income or loss plus Net loss plus Individual total deductions, less Net capital gain, must be under $40,000. Loss type '6' or '7' can only be used when the assessable income is less than $40,000.
Contact the ATO if you need further assistance with losses.