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Set off of losess

dalbir (VP) (38 Points)

12 December 2011

Can b/f business loss of A.yr 2009-10 can be adjusted with speculation business income of A.yr 2010-11 u/s 72 ?

Thanks

Dalbir

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11 Replies

Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 12 December 2011

Yes it can be set-off. However the reverse is not allowed.

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CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 12 December 2011

Prior year business loss can be set off against speculation income, however loss from speculation can not be set off against income from business other than speculation business.

CA Vanamala Phani Kumar (Proprietor of M/s Vanamala and Co) (972 Points)
Replied 12 December 2011

Sorry bros...!!!!!

The ans is

NO...!!!!!!!

Current year Business Loss can be set off from any Income except Salaries (as per sec 71)

but brought froward business loss can be set off only against business income..!!

In the above scenario Business loss FY 08-09 can not be set-off against Speculation Income in FY 09-10

for more details see the below link

https://www.vakilno1.com/bareacts/incometaxact/s72.htm

Thanks for oppurtunity

CA LALIT WADHWA (FRESHER) (105 Points)
Replied 13 December 2011

Phani m nt agree wd u...Giridhar n Ketan is rt

@ DALBIR-YES U CAN...

dalbir (VP) (38 Points)
Replied 13 December 2011

Dear Phani,

Thanks for ur reply.

but does the business income excludes speculation income?

I don't think so.

Regards,

Dalbir

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(Guest)

Rules A: Set off of losses – Intra head adjustments (Inter source adjustments)

Loss from one source of income can be adjusted against income from some other source of income under the same head.

It is subject to the following exceptions

1. Loss from speculation business cannot be set of against profit from an non speculation business

(Interpretation: Loss from non speculative business can be set-off against speculation income)

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Profits & gains from Business or Profession income includes speculation income.i.e. Business income is divided into Speculation & non speculation income.

dalbir (VP) (38 Points)
Replied 13 December 2011

querry is regarding set off of b/f business loss(non speculative) with speculation business income of current yr.

CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 13 December 2011

Dalbir ji,

B/f business loss (non speculation business) can be set off against any business profit (whether from speculation or otherwise) in next year(s) , Continuation of business is not necessary.

You can claim set off.

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