Scribd
Upload
6 views

Set Off An Carryforward

Uploaded by

DIVAKAR.VELYA.M MDV
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
6 views

Set Off An Carryforward

Uploaded by

DIVAKAR.VELYA.M MDV
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Set off and Carry Forward of

Loss
Set off of losses
• Set off of losses means adjusting the losses against
the profit or income of that particular year.
• Losses that are not set off against income in the same
year can be carried forward to the subsequent years
for set off against income of those years.
• A set-off could be an intra-head set-off or an inter-
head set-off.
Intra-head Set Off
• The losses from one source of income can be set off
against income from another source under the same
head of income.
• For eg: Loss from Business A can be set off against
profit from Business B, where Business A is one
source and Business B is another source and the
common head of income is “Business”.
Exceptions to an intra-head set off:
• Losses from a speculative business
• Loss from an activity of owning and maintaining
race-horses.
• Long-term capital loss
• Long-term capital loss
Inter-head Set Off
• After the intra-head adjustments, the taxpayers
can set off remaining losses against income
from other heads.
Eg. Loss from house property can be set off
against salary income.
Following losses can’t be set off against
any other head of income:
a. Speculative Business loss
b. Specified business loss
c. Capital Losses
d. Losses from an activity of owning and
maintaining race-horses
Carry forward of losses
• After making the appropriate and permissible intra-
head and inter-head adjustments, there could still be
unadjusted losses. These unadjusted losses can be
carried forward to future years for adjustments
against income of these years. The rules as regards
carry forward differ slightly for different heads of
income.
Carry forward of losses
• House Property – 8 Years
a) Intra head adjustment
b) Inter head adjustment (max 2,00,000)
c) Carry forward
• Loss from Business (other than Speculation loss
and loss from Specified business) – 8 Years
a) Intra head adjustment
b) Inter head adjustment (except salary)
c) Carry forward
Carry forward of losses
• Speculation Loss – 4 Years
a) Set off against speculation business income
b) Carry forward
• Loss from Specified Business (u/s 35AD) – No time
limit
a) Set off against specified business income
b) Carry forward
Carry forward of losses
• Short Term Capital Loss – 8 Years
a) Set off against STCG and LTCG
b) Carry forward
• Long Term Capital Loss – 8 Years
a) Set off against LTCG only
b) Carry forward
• Loss from Owning and Maintaining race horses -
4 Years
a) Set off against same income
b) Carry forward

You might also like