Setoff of business loss -intra head

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2015 i am having a business loss of Rs.25 lacs
i am having short term capital gain taxable u/s 111A OF Rs.33 lacs
i am having income form other sources of Rs.19 lacs
i am having salary income of Rs.12 lacs

can i adjust income from other sources first against the business loss and then adjust balance against STCG.

i am also having a carry forward STCLOSS OF 9 LACS.

is there any provision in law which says that intra head adjustments are to be from the angle of beneficial to assessee.

please reply urgent.

CA CS LAVESH VASYANI

CA CS LAVESH VASYANI (Expert)
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04 December 2015 Business loss of Rs. 25 lacs is to be adjusted against stcg of Rs. 33 lacs first i.e. (33-25). The balance lying is STCG is 8 Lacs is to be adjusted against b/f 12 Lacs. The C/f STCL is 4.

Total Income
Salary - 12
STCL - 4 (to be c/f)
OS - 19

Total 16

Querist : Anonymous

Querist : Anonymous (Querist)

04 December 2015 cant we adjust the business loss against income from other sources first and then the balance from stcg as it will drastically reduce my liability and as such the rate of tax on stcg is different from regular rate of tax. then as per my view it should be adjusted with other sources first.

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CA CS LAVESH VASYANI

CA CS LAVESH VASYANI (Expert)
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05 December 2015 No you cant adjust business loss against other source directly. There is a hierarchy of heads in which the capital gain comes before the other sources.

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2015 is this stated any where in the law that the hierarachy has to adopted as per my knowledge it is what is beneficial to the assessee.
please guide

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2015 act or sections are to be read to the benefits of the assessee that is what i know.