Set-off of loss from one head against another head
This query is : Resolved
Jignesh Desai
(Querist)
09 June 2012
Suppose a Person , Mr.A , incurred Business Loss of Rs. 5,00,000 in a particular year . In the same year , his Income from Other Sources was Rs. 5,00,000 . Would Business Loss of Rs. 3,20,000 COMPULSORILY have to be set-off against Income from other Sources & the Balance Business Loss of Rs. 1,80,000 carried forward to next year ?
In other words , is it compulsory to set off Loss from a Particular Head against Incomes from other Heads (wherever permissible & posssible ) in a particular year or does the assessee have an option of being able to carry forward this ENTIRE Loss to the next year without setting it off against Income from other Heads during the same year ?
In other words , is it compulsory to set off Loss from a Particular Head against Incomes from other Heads (wherever permissible & posssible ) in a particular year or does the assessee have an option of being able to carry forward this ENTIRE Loss to the next year without setting it off against Income from other Heads during the same year ?
09 June 2012
inter head adjustment of losses is a mandatory provision of law. An assessee cannot choose to carry forward a loss which is otherwise permissible against available profits.
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C.A Anshul Singhal
(Expert)
09 June 2012
inter head adjustment are mandatory & you can adjust business loss from others income(except winning from lottery& horse race).
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