Please sent me the soft copy tax treatment of each five head losses
thanks in advance
CA CS CIMA Prakash Somani
Replied 07 January 2009
The manner and process of setting-off of losses and the subsequent carry forward of balance losses flow in the following manner:
INTER SOURCE ADJUSTMENT
Adjustment of loss from one source against income from another source within the same head of income within the same year.
INTER HEAD ADJUSTMENT
Adjustment of loss under one head against income from another head of income within the same year.
CARRY FORWARD OF LOSSES
The balance loss after the above two adjustments are carried forward to the subsequent assessment year.
However, all the above are subject to certain conditions which have been presented in a nutshell.
|For the Current Assessment Year||For Subsequent Assessment Year|
|Type of loss||Inter source Adjustment (Sec 70) (same head of Income)||Inter Head Adjustment (Sec 71) (Different heads of Income)||Carry Forward of Losses and for how many years||Profit/Income against which carried forward loss can be Set off in subsequent year(s)||Should the business/ activity continue||Is it necessary to submit return of loss in time in accordance with Sec 139(1)|
|House Property (Sec 71B)||Allowed||Allowed||Allowed for 8 Years||Income under the head "Income From house Property"||N.A.||No|
|Capital Gains||Allowed (Short Term Capital Losses can be Set Off Against Long Term Capital Gains and Vice Versa)||Not Allowed||Allowed for 8 Years||Any Income under the head "Capital Gains" (Short Term Capital Losses can be Set Off Against Long Term Capital Gains and Vice Versa)||Not Necessary||Yes|
|Income From Other Sources (Other than Loss from activity of owing and maintaining race horses||Allowed (Losses cannot be set off against winnings from lotteries, crossword puzzles etc.)||Allowed||Allowed||N.A.||N.A.||No|
|Loss from the activity of owing and maintaining race horses (Sec 74A)||Allowed only against income from the activity of owing and maintaining race horses||Not Allowed||Allowed for 4 years||Loss from activity of owing and maintaining race horses can be set off only against income from activity of owing and maintaining race horses||Yes||Yes|
|Speculation Loss (Sec 73)||Allowed only against Speculation profits||Not Allowed||Allowed for 8 years||Speculation Losses can be set off only against Speculation Profits||Not necessary||Yes|