Do the provisions pertaining to set-off and carry forward of losses confuse you too?

If yes, then you have arrived at the right place that will clear most of your confusion as I have here tried to summarise the sections in the simplest way possible.

Few points to understand before you start going through the table.

The losses are to be set-off in the sequence mentioned:

  • first the losses are set-off under the same head of income
  • second from any other head of income
  • residual to be carried forward to further assessment years
  Heads of Income
Salary House Property Business/ Profession Capital Gains Other Sources
  S.T.C.G L.T.C.G  
1 Loss u/h House Property
  Section 70
  Section 71 (Max. Rs. 2 Lacs)

(except Casual Income)

  Section 71B (c/fd – Max. 8 yrs)
   
2 Loss u/h Business / Profession
  Section 70
  Section 71 (Max. Rs. 2 Lacs)

(except Casual Income)

  Section 72 (c/fd – Max. 8 yrs)
3 Loss u/h Other Sources
  Section 70

(except Casual Income)

  Section 71
c/fd – Not Allowed
4 Loss u/h Capital Gains – Short Term
  Section 70
  Section 74 (c/fd – Max. 8 yrs)
5 Loss u/h Capital Gains – Long Term
  Section 70  
  Section 74 (c/fd – Max. 8 yrs)  
6 Loss from Owning & Maintaining (O/M) Race Horses
  Section 74A

(only from O/M race horses)

  Section 74A (c/fd – Max. 4 yrs)

(only from O/M race horses)

Author Bio

Qualification: Student - CA/CS/CMA
Company: N/A
Location: New Delhi, Delhi, India
Member Since: 24 Oct 2021 | Total Posts: 1

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