Set Off and Carry Forward of Losses 1218288118076384 8

7/30/2019 Set Off and Carry Forward of Losses 1218288118076384 8

1/20


2/20

1. Inter source adjustment under the head ofincome (intra head adjustment)

2. Inter head adjustment in the sameassessment year.

3. Carry forward of loss.


3/20

If the net result for any assessment year, inrespect of any source under any head of

income, is a loss, the assessee is entitled tohave the amount of such loss set off againsthis income from any other source under headof income for the same assessment year.


4/20

Profit From Business A Rs. 500000

Loss From Business B Rs. 200000.

The Loss of Rs. 200000 can be set off with his Profit of Rs.500000. Therefore the amount taxable under the headProfit & Gains from Business will be (500000 200000) Rs.


5/20


6/20


7/20

Where the net result of computation made forany assessment year in respect of any head ofincome is a loss, the same can be set offagainst the income from other heads.


8/20

Profit From Business A Rs. 70000

Loss From Business B Rs. 290000.

Income from House property Rs. 510000

The Net Loss from both businesses of Rs. 220000(290000-70000) can be set off with House Property income of Rs.510000. Therefore the net income taxable is Rs. 290000.


9/20


10/20

Speculation Loss Cannot be set off againstany other head.

Capital Loss - Cannot be set off against anyother head except Capital Gains.

Loss from the activity of owning andmaintaining race horses - Cannot be set offagainst any other head.

Business loss cannot be set off with Salary.

Loss cannot be set off against winnings fromlotteries, crossword puzzles etc.

Loss from purchase of securities.


11/20

The following losses can be carried forward: - Loss under the head Income from House

Property.

Loss under the head Profits and Gains fromBusiness or Profession.

Loss under the head Capital Gains.

Loss from the activity of owning and

maintaining race horses.


12/20

Loss can be set off only against businessincome.

Losses can be carried forward by the person

who incurred the loss. Loss can be carried forward for 8 years.

Return of loss should be submitted in time.

Continuity of business not necessary.

Carry forward of unabsorbed depreciation,capital expenditure on scientific research andfamily planning expenses.


13/20

Sec 43(5)

Transaction

involving purchase

or sale of any

commodity

Periodically settled Actual delivery

Transfer of

commodity or

scripts


14/20

Speculative loss can be set off only againstspeculative income.

Can be carried forward for 4 years. Continuity of Business is not necessary.

Return of Loss should be submitted in time.


15/20

Long term capital loss can be set off only againstlong term capital gains.

Short term can be set off against short term orlong term capital gains.

Such loss can be carried forward for 8assessment years immediately succeeding theassessment year in which the loss was firstcomputed.

Such loss can be carried forward unless return isfiled within the time limit of the section.


16/20

Loss from such activities can be carried forwardto a subsequent year and set off only againstincome from the business of owning and

maintaining race horses.

Loss can be carried forward for four assessmentyears immediately succeeding the assessment

year in which the loss was first computed.

Such loss cannot be carried forward unless returnis filed within the time limit of section 139(1).


17/20

Loss can be carried forward for eightassessment years.


18/20

Income from House I 60000 Loss from House II (30000)

NET INCOME 30000

He has brought forward losses H1 (98-99)30000, H2 (2001-02) 35000

98-99 H1 loss will be ignored.

Loss of 01-02 will be adjusted with 30000. Therefore 5000 will be carried forward.


19/20

HOUSE PROPERTY LOSS INCOME FROM HOUSE PROPERTY 8 YEARS.

SPECULATION LOSS SPECULATION PROFITS 4 YEARS.

NON SPECULATION BUSINESS

LOSS:

Unabsorbed Depreciation,Scientific Research & FamilyPlanning Expenditure

ANY INCOME NO TIMELIMIT

Other Business Losses SPECULATIVE AND NON SPECULATIVE 8 YEARS

SHORT TERM CAPITAL LOSS SHORT AND LONG TERM GAINS 8 YEARS

LONG TERM CAPITAL LOSS LONG TERM CAPITAL GAINS 8 YEARS

LOSS FROM ACTIVITY OFOWNING & MAINTAINING RACEHORSES

INCOME FROM SUCH ACTIVITY 4 YEARS


20/20

Arthur

LASRADO

15

Erwin PATRAO

23

Ajay JOB

2

Documents

Set Off and Carry Forward of Losses 1218288118076384 8