The document discusses set-off and carry forward of losses under the Indian Income Tax Act. It provides examples of computing total income for various assessees by setting off current year losses against income under the same head and carrying forward unabsorbed losses. It also illustrates how to set-off capital losses against capital gains and carry forward the unabsorbed losses. The document contains computational examples showing the set-off of losses from previous years against current year income under the same head and the calculation of gross total income.

1. Set-off and Carry Forward of Losses
Dr. NGPASC
COIMBATORE | INDIA
Dr. N.G.P. ARTS AND SCIENCE COLLEGE
(An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore)
Approved by Government of Tamil Nadu and Accredited by NAAC with 'A' Grade (2nd Cycle)
Dr. N.G.P.- Kalapatti Road, Coimbatore-641048, Tamil Nadu, India
Web: www.drngpasc.ac.in | Email: info@drngpasc.ac.in | Phone: +91-422-2369100
Dr. R. Prema
Associate Professor in Commerce CA

2. Dr. NGPASC
COIMBATORE | INDIA
Set-off and Carry Forward of Losses
Set-off &
Carry Forward
of Losses
Set-off Losses
Carry forward
and set-off of
losses

3. Dr. NGPASC
COIMBATORE | INDIA
Set-off and Carry Forward of Losses

4. Dr. NGPASC
COIMBATORE | INDIA
Set-off and Carry Forward of Losses

5. Dr. NGPASC
COIMBATORE | INDIA
Set-off and Carry Forward of Losses

6. Dr. NGPASC
COIMBATORE | INDIA
Set-off and Carry Forward of Losses

7. Dr. NGPASC
COIMBATORE | INDIA
PROBLEM
1. The following are the particulars of income and loss of an individual under different heads of
income. Set-off losses in the assessment year 2020-2021 and find out the net result:
Income from house property A - ₹5,000
Income from house property B - ₹(8,000)
Income from interest on securities – ₹20,000
Income from a cycle business – ₹(20,000)
Profit from speculation business - ₹ 20,000
Loss from short-term capital asset - ₹6,000
Long term capital loss - ₹25,000
Long term capital gain (Investment) - ₹21,000

8. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the P/Y 2019-20
Particulars ₹ ₹
House property Income:
Income from House property A
Income from House property B
Can be set-off
5,000
(8,000)
(3,000)
Business Income:
Profit from speculation business
Profit from cycle business
20,000
(20,000) Nil
Capital gains:
Long term capital gains
Income from another long term capital asset
LTC loss to be c/f
Short term capital loss to be c/f
21,000
(25,000)
4,000
6,000
Income from other sources:
Interest on securities 20,000
Gross total Income 17,000

9. Dr. NGPASC
COIMBATORE | INDIA
PROBLEM
2. The following are the particulars of income of assessee A, B and C how the capital
losses shall be set off and carry forward for the previous year ending on 31.3.2020?
A) i) Business Income - ₹ 15,000
ii)Short term capital loss - ₹ 1,200
iii) Long term capital gain (plot) - ₹ 7,200
iv) Long term capital gain on sale of Jewellery - ₹ 20,000
B) i) Business income - ₹ 30,000
ii) Short term capital loss - ₹ 40,000
C) i)Business income - ₹ 60,000
ii) Short term capital gain - ₹ 20,000
iii) Long term capital gain (land) - ₹ 17,000
iv) Carry forward loss (Short term capital assets) - ₹ 50,000

10. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the P/Y 2019-20
Particulars ₹ ₹
A) i) Business Income
ii) LTCG (Plot) 7,200
iii)LTCG on sale of Jewellery 20,000
Set-off short term capital loss
Net Capital Gain
Gross Total Income
27,200
-1,200
15,000
26,000
41,000
B) i) Business Income:
ii) Short term capital loss to be c/f 40,000
Gross Total Income
30,000
-
30,000
C) i) Business Income
ii) LTCG (Land)
iii) Short term capital gain
Set-off short term capital loss B/F
ST Capital loss still to be C/F
Gross Total Income
17,000
20,000
37,000
50,000
13,000
60,000
Nil
60,000

11. 3. Mr. Atul, an indian resident, furnishes the following particulars of his income for the assessment year
2020-2021. Your are requires to deal with set-off and carry forward of losses.
i. Income from securities (Gross) - ₹ 10,000
ii. Income from residential house (Computed) - ₹ 5,000
iii. Profits from rayon business - ₹ 25,000
iv. Income from an agency business - ₹2,000
v. Speculation income - ₹2,000
vi. Short term capital gain - ₹ 4,000
vii. Long term capital gain - ₹ 9,500
The carry forward items from the assessment year 2019-2020 are:
i. Loss from hosiery business (discontinued in 2017-2018) - ₹ 4,000
ii. Loss in agency business - ₹ 3,000
iii. Loss from rayon business - ₹ 3,000
iv. Speculation loss - ₹ 4,000
v. Short term capital loss - ₹ 6,000
vi. Long term capital loss (of previous year 2017-2018) - ₹ 6,500
Current years depreciation for rayon business in ₹ 500
Dr. NGPASC
COIMBATORE | INDIA
PROBLEM

12. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the P/Y 2019-20
Particulars ₹ ₹
1) House property Income:
Income from House property 5,000
2)Business Income:
i) Speculation Business
Income from speculation business
Set-off brought forward speculation loss
Carry-forward speculation loss
ii) Rayon Business:
Income from rayon business
(-) Current depreciation
Set off brought forward business
Loss from rayon business 3,000
Loss from hosiery business 4,000
2,000
(4,000)
(2,000)
25,000
500
24,500
7,000
17,500

13. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the P/Y 2019-20
Particulars ₹ ₹
iii) Agency Business
Income from agency business 2,000
Set-off loss b/f (3,000)
Income under the head profits and gains
(1000)
16,500
3) Capital Gains:
Long term capital gain 9,500
Set-off b/f long term capital loss 6,500
Short term capital gains 4,000
Set-off b/f short term capital loss 6,000
Taxable long term capital gain
3,000
(2,000)
1,000
4) Other sources : Interest on securities 10,000
Gross total Income 32,500

14. 4. The following are the particulars of income of an assessee as determined by the assessee officer for the
assessment year 2020-2021. Compute his total income.
Assessment year 2019-2020
Silver speculation loss (discontinued) - ₹ 10,000
Hosiery business loss - ₹ 6,000
Rolling Steel Mill profit (before charging of depreciation of ₹ 10,000) - ₹ 8,000
Profit from another business - ₹ 5,000
Income from house property - ₹ 2,000
Assessment year 2020-2021
Gold speculation profit - ₹ 20,000
Hosiery business loss - ₹ 2,000
Rolling Steel Mill profit (before charging depreciation of ₹ 10,000) - ₹ 6,000
Profit from another business - ₹ 16,000
Income from house property - ₹ 2,000
Dr. NGPASC
COIMBATORE | INDIA
PROBLEM

15. Particulars ₹ ₹
1) House property Income:
Income from House property 2,000
2)Business Income:
i) Rolling steel mill profit
less: Depreciation
Unabsorbed depreciation
ii) Income from another business
iii) Hosiery business
Set-off against other income
iv) Silver speculation loss 10,000 c/f to next year
8,000
10,000
(2,000)
5,000
(6,000)
(1,000)
NIL
(1,000)
Available Income
Set-off unabsorbed depreciation upto available income 2,000
1,000
(1,000)
Gross total Income
Unabsorbed depreciation – 1,000 and speculation loss – 10,000 are to be c/f
to next year
NIL
Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2019-20

16. Particulars ₹ ₹
1) House property Income:
Income from House property 2,000
2)Business Income:
i) Rolling steel mill profit
less: Depreciation
Unabsorbed depreciation
ii) Income from another business
iii) Hosiery business
iv) Gold speculation gain
Less: Set-off Speculation b/f from previous year
Available income (Add all four sources of income)
Less: Depreciation b/f
6,000
10,000
(4,000)
16,000
(2,000)
14,000
20,000
10,000
10,000
20,000
1,000 19,000
Gross total income 21,000Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2020-21

17. 5. Mr. Singh, a resident of India, submits the following particulars of his income for the assessment year 2020-
2021.
i. Income from house let-out (computed) -₹ 9,500
ii. Profit from radio business -₹ 19,600
iii. Profit from electric business -₹ 1,800
iv. Speculation income - ₹ 1,900
v. Short term capital gains - ₹ 3,200
vi. Long term capital gains - ₹9,250
Current year depreciation relating to electric goods business is ₹2,500
The following items have been brought forward from proceeding assessment year.
i. Loss from cycle business discontinued during the previous year 2018-2019 - ₹ 3,900
ii. Loss from electric business - ₹2,700
iii. Loss from radio business - ₹ 1,900
iv. Unabsorbed depreciation of electric business - ₹ 1,000
v. Unabsorbed family planning expenditure - ₹ 2,600
vi. Speculation loss - ₹ 3,200
vii. STC loss from the year 2016-2017 - ₹ 4,100
viii. LTC loss from the year 2017-2018 - ₹ 6,450
Compute GTI.
Dr. NGPASC
COIMBATORE | INDIA
PROBLEM

18. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2019-20
Particulars ₹ ₹ ₹
1) House property Income:
Income from let-out property
9,500
2)Business Income:
Speculation Income
Less: loss on speculation
S loss c/f next year
Radio business
Less: loss on radio business
Less: Discontinued business loss
Electric income
Less: loss in Electric business
Less: current year depreciation
Less: Unabsorbed depreciation
1,900
(3,200)
(1,300)
19,600
(1,900)
17,700
(3,900)
1,800
(2,700)
(2,500)
13,800
(3,400)
10,400
(1,000)
9,400

19. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2019-20
Particulars ₹ ₹ ₹
3) Capital Gain
LTCG
Less: loss on LTCG
STCG
Less: loss on STCG
9,250
6,450
3,200
4,100
2,800
(900) 1,900
GTI 20,800
Note: Unabsorbed family planning expenditure cannot be set-off

20. 6. Mr. Ram Patel submits the following particulars of his income and losses for the assessment year 2020-2021.
1. Salary Income (computed) - ₹ 24,000
2. Income from HP
House A (income) - ₹ 10,000
House B (loss) - ₹ 40,000
House (self-occupied) loss - ₹ 28,000
3. Income from Business
Cloth business (profit) - ₹ 10,000
Hardware business (loss) - ₹ 12,000
Speculation (profit) - ₹ 12,000
Speculation (loss) - ₹ 17,000
4. Capital Gains
ST gain - ₹ 8,000
ST loss - ₹ 24,000
LT gain - ₹ 8,000
5. Other sources
Income from betting - ₹ 12,000
Loss from card games - ₹ 6,000
Income from card games - ₹ 9,000
Interest on securities (gross) - ₹ 8,000
Dr. NGPASC
COIMBATORE | INDIA
PROBLEM

21. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2019-20
Particulars ₹ ₹ ₹
1) Salary Income
Salary Income
24,000
2) Income from HP
House A
House B
Self-Occupied house
10,000
(40,000)
(28,000)
(58,000)
3) Income from Business
Cloth business (profit)
Hardware business (loss)
Speculation (profit)
Less: Speculation (loss)
Speculation loss to be c/f
10,000
12,000
12,000
17,000
(5,000)
(2,000)

22. Dr. NGPASC
COIMBATORE | INDIA
Computation of Total Income of an Assessee for the A/Y 2019-20
Particulars ₹ ₹ ₹
4) Capital Gain
LTCG
STCG
(-) STC loss
STC loss to be c/f
8,000
24,000
8,000
(16,000)
(8,000)
5) Other sources
Casual Income:
Income from betting
Income from card games
Loss from card games cannot be set off
Other than casual income:
Interest on securities
12,000
9,000
8,000 29,000
GTI
Business loss to be set off from interest on securities, HP loss ₹58,000 can
be set from salary income and interest on securities and the balance HP
loss ₹28,000 to be c/f to next year
21,000

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