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Set off

Kajal Khetwani (236 Points)

02 June 2017

mr hussey has
1. business loss rs 130000
2. salary 240000
3. speculation gain 110000

total income for taxability?

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11 Replies

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 02 June 2017

Income is Rs.350000/-

3 Like

Poltu Ghosh (Job) (1865 Points)
Replied 02 June 2017

I beg to differ. Total Income is Rs 260000. Speculative gain can be set off any business loss provided conditions of section 71 is met

2 Like

Kajal Khetwani (236 Points)
Replied 02 June 2017

it is not provided in question
that the business loss is specified business loss or just business loss

Sunil Sharma (CMA & CS) (584 Points)
Replied 02 June 2017

There will not be any tax liability as it's below the exemption limit and the Total income for computation would be 2.4l
20000 will be carry forward after setting off the Business loss with speculative gain and as said by Mr.Gosh if satisfy sec 71

Poltu Ghosh (Job) (1865 Points)
Replied 02 June 2017

Then assumption on the nature of loss is to be taken. Speculative loss is of special nature whereas business loss is of General nature. If specific nature is not mentioned it has to be assumed as General business loss.

Poltu Ghosh (Job) (1865 Points)
Replied 02 June 2017

Yes it was my computation mistake. Total income will be Rs. 240000 and Rs 20000 will be carried forward. Thanks for correction, Mr. Sunil.

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 02 June 2017

Also speculation gain added in income

4 Like

Sunil Sharma (CMA & CS) (584 Points)
Replied 03 June 2017

Originally posted by : Rashmi Gandhi
	Also speculation gain added in income

Ms.Rashmi Gandhi , Speculation Income would be added and sett off against the Business Loss and only the final Numbers are to be taken for the considersation. In this case INR 20,000 would again be carry forward as Business Loss cannot be set off against the salary Income so only the salary part would be coming and there will not be any tax liability as that being under the Basic exemption limit.

Regards,

Sunil Sharma

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 03 June 2017

How normal Loss set off from Speculation Gain

1 Like

Sunil Sharma (CMA & CS) (584 Points)
Replied 03 June 2017

Kindly refer the file attached which are the FAQ's issued by the Income Tax Authorities and refer the Point Number 1 under the head

* Restrictions to be kept in mind while making intra-head adjustment of loss

also find the following link for the same

https://www.incometaxindia.gov.in/Tutorials/21-%20MCQ%20set%20off%20and%20carry%20frwrd.pdf

Hope this would clarify..!!

Regards,

Sunil Sharma

Attached File : 928156 20170603155829 21 mcq set off and carry frwrd.pdf downloaded: 82 times

Poltu Ghosh (Job) (1865 Points)
Replied 03 June 2017

Please read section 71 and section 73. All the confusions will be cleared. In nutshell, there is no significance of speculative and non speculative income. Only speculative business loss has special treatment in income tax. Speculative business loss can be set off only against speculative business income. This is the only implication of speculative loss.