What are the conditions for intra-head and inter-head set off of losses?
- Loss from speculation business cannot be set of
against profit from a non-speculation business, but loss from non-speculative
business can be set-off against speculation income.
- Loss under Capital Gains (Long term or short
term) cannot be set-off against any other head.
- Long term capital loss can only be set off
against Long term capital gain, and not against short term capital gain. However,
you can set off short-term capital loss against long term capital gain.
- You cannot set off any loss against casual
income i.e. Income from lotteries, crossword puzzles, race including horse
race, card game, or any other games, or gambling or betting of any form.
- No expenses can be claimed against casual income.
- Loss from the business of owning and maintaining
race horses cannot be set off against any income other than income from the same
business.
- Any loss arising from an exempted source of
income cannot be set off against taxable Income.
- Loss from business specified under section 35AD
cannot be set off against any other income except income from the same business.
- With effect from the assessment year 2018-19,
loss under the head “house property” shall be allowed to be set -off against
any other head of income only to the extent of Rs. 2,00,000 for any assessment
year. However, any loss that could not be set off in the last year shall be
allowed to be carried forward for set-off in subsequent years as per the
existing provisions of section 71B.