Setoff provisions of income tax - setoff of pgbp loss with ios

1) Before making inter-head adjustment, the taxpayer has to first make intra-head adjustment.

2) Loss from speculative business cannot be set off against any other income. However, non-speculative business loss can be set off against income from speculative business.

3) Loss under head “Capital gains” cannot be set off against income under other heads of income.

4) No loss can be set off against income from winnings from lotteries, crossword puzzles, race including horse race, card game, and any other game of any sort or from gambling or betting of any form or nature.

5) Loss from the business of owning and maintaining race horses cannot be set off against any other income.

6) Loss from business specified under section 35AD cannot be set off against any other income (section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating warehousing facility for storage of agricultural produce, developing and building housing projects, etc.)

7) Loss from business and profession cannot be set off against income chargeable to tax under the head “Salaries”.

1. Salary:- losses not possible.

2. House property:
• # Losses can be set off against any income under any head in current year up to Rs. 2 lakhs

• #  Losses can be carried forward for 8 AY's and set off against Income from House property

3. PGBP:-
• # Loss of owning and maintaining race horses can be set off against only income from same source & It can be c/f for 4 years only.

• # Speculative Loss can be set off only against income from same source & it can be c/f for 4 years only.

• # Loss of Specific Business u/s 35AD can be set off only against same source of income & it can be c/f for unlimited year's.

# Other losses of PGBP can be set off against any income under any head except salary income in current year.  It can be c/f for 8 years and set off against any business income in subsequent year's.

4. Capital Loss:
• # LTCG loss can be set off only against LTCG.

• # STCG loss can be set off against both STCG as well as LTCG.

• # Capital Loss can be c/f for 8 years.


5. Other sources:
• # Set off is available against any income under any head in current year.

• # It cannot be carried forward.

Extra Notes :-
1. Loss of house property and unabsorbed depreciation can be carried forward even if ROI is filled after due date u/s 139(1).

2. Losses u/s 72, 73, 73A, 74, 74A can't be c/f if ROI is filled after due date u/s 139(1).