summary of rules for set-off and carry forward of losses under income tax act 1961

1. SET-OFF AND CARRY FORWARD
UNDER INCOMETAX ACT-1961

2. INCOME FROM SALARY
•Losses not possible.Therefore, no question of set-
off or carry forward arises.

3. Income from house property
LOSS
It can be set-off against any income under any head in current
year
It can be carry forward to next 8 AYs and set-off only against
the income from house property

4. Profits & gains of business or profession
Loss from Owning & speculation loss
Maintenance Of race Horses
It can be set-off only against It can be set-off against the same
Income from the same source source
It can be C/F to next 4 AYs & It can be C/F to next 4 AYs &
Set-off against the income set-off against the speculation
From owning & maintenance of income
Race horses cont….

5. Profits & gains of business or profession
loss from specified business other losses
Under section 35AD
It can be S/O against the it can be S/O against any source
Same source or any head except income from
salary
It can be C/F to indefinite AYs
& S/O against the income It can be C/F to next 8 AYs & S/O
From the specified business against any business income
Under section 35AD

6. Capital gain
Long term capital loss Short term capital loss
It can be set-off against Long It can be S/O against the same
term capital gain Only. No source or LTCG
other set-off Is possible
It can be C/F to next 8 AYs It can be C/F to next 8 AYs &
& set-off against LTCG S/O against LTCG or STCG

7. INCOME FROM OTHER SOURCE
It can be S/O against any income under any head
It cannot be carry forward

8. Thank you
by: Himanshu sharma