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There can be profit and also losses in every type of business, where losses are difficult to digest. Though Income Tax Act in India provides for the benefits of losses too. The law contains the provisions for set off and carry forward of losses. SET OFF OF LOSSES Set off of losses means making
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FAQ :
Set off of losses means adjusting losses against the profits earned in the same financial year.
Intra-head set off allows adjusting losses from one source of income against income from another source under the same head. Inter-head set off allows adjusting remaining losses against income from different heads of income.
Losses from house property can be carried forward for up to 8 years and can only be adjusted against income from house property.
Non-speculative business losses can be carried forward for up to 8 assessment years and adjusted against business and profession income. The return must be filed on time, but the business doesn't need to be continuing.
Yes, capital losses can be carried forward for up to 8 assessment years. Long-term capital losses can only be set off against long-term capital gains, while short-term capital losses can be set off against both long-term and short-term capital gains. The return must be filed on time.
No time limit is specified for carrying forward losses under Section 35AD, provided the return is filed on time. These losses can only be adjusted against income from specified businesses.
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