ii. Setting off Losses
I have loss under the head 'Income from House Property'. Can I set it off against income from Salaries?
Yes, it can be set off against income from salaries BUT only up to Rs. 2,00,000.
I have a loss under the head of 'Income from business and profession'. Can I set it off against income from salaries?
No. It cannot be set off against income from salaries.
I have a loss under the head of 'Long term capital gains'. Can I set it off against income from salaries?
No. It cannot be set off against income from salaries. It can only be set off against long term capital gains.
I have a loss under the head of 'Short term capital gains'. Can I set it off against income from salaries?
No. It cannot be set off against income from salaries. It can be set off against short term capital gains or long term capital gains only.
Can there be a loss under the head 'Salaries'?
No. There cannot be a loss under the head of salaries.
What is the difference between inter-source and inter-head adjustment?
A taxpayer who has incurred a loss from a source under a particular head of income is allowed to adjust the loss against income from any other source falling under the same head. This is called inter-source adjustment. After this, the taxpayer can ...
If a particular source of income is exempt from tax, then can the loss from such income be set off against any other taxable income?
No, you cannot set off a loss from a tax-exempt income with a taxable income. E.g., Agricultural income is exempt from tax. Therefore, if the taxpayer incurs a loss from agricultural activity, it cannot be adjusted against any other taxable income.
What are the conditions to keep in mind while carrying forward losses for set off?
Following conditions must be kept in mind while carrying forward losses for set off: Any losses of past year can be set-off only against income from that respective head of income (Inter head adjustment is not possible). However, unabsorbed ...
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 ...
What are the different ways in which losses can be set off for the purpose of reducing the tax liability?
There are three ways in which the taxpayer can set-off losses. Set off loss under the same head of income (intra-head set off), e.g. setting off of loss from business A against profit from business B. Set off loss from one head against income from ...