Set off of losses against other income

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This discussion clarifies how a salaried individual with options trading income can offset business losses. Non-speculative business losses, like those from F&O trading, can be set off against most income sources, excluding salary. However, long-term and short-term capital losses can only be offset against corresponding capital gains.

Suraj

Suraj (Querist)

19 March 2023 Dear sir / Madam,

My query is as follows:
Mr A who is salaried person, also does options trading. He prepares P&L and balance sheet for options trading business. He has past F&O business losses as well as past short term & long term capital losses in shares trading, which are now carried forward to FY 2022-23. During the year FY 2022-23 also, he has F&O business loss and sizable Other income.

I wish to know whether can he set off past F&O business losses as well as current business losses against the current years Other Income?

Basically, which type of losses are adjusted against other income?

Kindly guide.
Thanks & regards,
Suraj

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

19 March 2023 You can set off Non-Speculative Business Loss (here F&O loss) against any income except salary income. So, you can set off the loss with other income heads except salary income.
You cannot set off LTCL i.e. long-term capital loss against any income other than LTCG i.e. long-term capital gain. Further, you cannot set off STCL i.e. short-term capital loss against any income other than STCG i.e. short-term capital gain, and LTCG i.e. long-term capital gain.

Message likes : 1 times

Suraj

Suraj (Querist)

20 March 2023 Thank You So much Sir !!

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 March 2023 You are welcome.

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