Set off of loss while filing income tax returns

ITR 444 views 2 replies

I have a current year business loss of 5 lakhs, Income from other sources of 3 lakhs and L.T. capital gain @ 20% of 11 lakhs. What I want to do is setoff 5 L(B.L) with 11 L(L.T.C.G) and pay for balance 6 lakhs at 20% rate applicable for C.G. my Tax would be 1,20,000+ 10,000 (3L-2L BEL  * 10%) . Whereas when I fill in the details in ITR 4 for AY 2013-14, it sets off B.L with I.O.S first and the balance with L.T.C.G. Hence my LTCG after set off is 9L-2L (B.E.L) and hence by tax is 1,40,000 which is 10,000 more. Please help me to file my returns the tax efficient way.

Would really help if you reply at the earliest.
 

Replies (2)

Since flat rate of 20% is applicable on LTCG, business loss should be 1st set off with IFOS.

The Income tax act never mentions that loss should be set off first against IFOS. Infact setoff is allowed that is advantageous to the assessee. Since LTCG has higher tax rate (for an individual in 10% tax slab) any one would first set it off against losses


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