Neethi V. Kannanth
Quick Summary
Key Points To Remember Set off meaning It refers to adjusting losses against profits within the same year. Any losses which are unutilizedcan be carried forward to subsequent years for set off against profits. Types of Set off Losses
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FAQ :
Set off refers to adjusting losses against profits within the same financial year. Carry forward allows any unutilised losses to be carried to subsequent years to be set off against future profits.
The two main ways to set off losses are intra-head adjustments, where losses from one source of income are adjusted against income from another source under the same head, and inter-head adjustments, where losses from one head of income are adjusted against income from a different head.
Yes, there are restrictions. For example, no business losses can offset salary income, and house property losses are limited to £200,000 for set off against other income. Certain specific business losses also have limitations on the types of income they can offset.
Unabsorbed depreciation and losses from specified businesses under section 35AD can be carried forward indefinitely.
Losses from house property can be carried forward for eight assessment years.
No, not all losses can be set off. For instance, losses from an exempted source of income, such as agricultural activities, cannot be adjusted against a taxable source of income.
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