Set off

I WANT TO KNOW WHICH SET OFF IS AS PER RULE & CAN POSSIBLE TO DO..?

QUE. - FIND SET OF FOR AY 2012-13, --  iNDIVIDUAL HAVE SPECULATION LOSS C/F FOR AY 2011-12.RS.600000/-

INCOME OF AY 2012-13 IS INTEREST RS.3300000/- , SPECULATION INCOME RS.700000/-, BUSINESS LOSS INCULDING (INTEREST PAID OF RS.2900000/-) RS. 3100000/-

WHICH ANSWER IS CORRECT

OPTION 1 - SPECULATION INCOME 700000 - SETOFF LOSS OF AY 2011-12 RS.600000/-  = NET 1000000/-

                  & INTEREST INCOME 3300000/-- CURRENT YEAR BUSINESS LOSS SETOFF rS.3100000/- = NET 200000/-

OPTION -2, SPECULATION PROFIT 700000 - CURRENT YEAR BUSINESS LOSS SETOFF UP TO  rS.700000 = NET niL

                  & INTEREST INCOME 3300000/-- CURRENT YEAR BUSINESS LOSS SETOFF rS.2400000(31-7)/-=       NET 900000/- & LOSS OF SPECULATION OF AY 2011-12 600000/- TO BE C/F

OPTION -3, INTEREST INCOME RS. 3300000- INTERST EXPS. RS.2900000= NET INTEREST 400000

 BUSINESS LOSS 3100000- INTEREST EXS.2900000= 200000 NET BUSINESS LOSS

INTEREST 400000 = NET INTEREST INCOME 400000

SPECULATION PROFIT RS.700000/- - CY. BUSINESS LOSS SET OFF 200000- PY SPECULATION LOSS RS. UP TO 500000= NET NIL & LOSS OF SPECULATION AY 2011-12 CF RS.100000.