SET OFF & CARRY FORWARD OF LOSSES

INTRODUCTION

Set-off of losses: means adjusting the losses against

the profit of that financial year.

Carry Forward of losses: losses can be carried forward

to next assessment years if there are no adequate
profits subject to the conditions stated in the Act
(Sections 70 to 80).
MODE OF SET-OFF & CARRY FORWARD

1. Income losses Intra-head Set off (Section 70)

2. Income losses Inter-head Set off (Section 71)

3. Income losses Carry Forward (Section 71B to 74A)

4. Income losses Brought Forward (Section 72A)

 PROVISIONS REGARDING SET-OFF OF LOSSES
(SECTION 70, 71)
LOSS SET-OFF
Loss from house property
Income from any other house property

Any other head of income upto

maximum of Rs. 2,00,000

Loss from business or

profession Income from any other business or
Profession.

Any other head of income except

under the head “Salaries”

Loss from speculation Income from speculation

 PROVISIONS REGARDING SET-OFF OF
LOSSES (SECTION 70, 71)
LOSS SET-OFF
Short-term capital loss Short-term capital gain
Long-term capital gain
Long-term capital loss Long-term capital gain

Loss from activity of Income from activity of owning and

owning and maintaining maintaining race horses
race horses
Loss from a business Income from a specified business
specified under Section under Section 35AD
35AD
PROVISIONS REGARDING CARRY FORWARD
& SET-OFF OF LOSSES (SECTION 72)
LOSS SET-OFF

Loss from house property In following eight years, income from

house property
Loss from business or In following eight years, income from
profession business or profession.
Loss from speculation In following four years (w.e.f. A.Y. 2006-
07), income from speculation
Short-term capital loss In following eight years:
(a) Short-term capital gain
(b) Long-term capital gain
PROVISIONS REGARDING CARRY FORWARD
& SET-OFF OF LOSSES (SECTION 72)
LOSS SET-OFF
Long-term capital loss In following eight years, Long-term
capital gain.

Loss from activity of In following four years, Income from

owning and maintaining activity of owing and maintaining race
race horses horses.

Loss from a business Income from a specified business

specified under Section under Section 35AD in future years.
35AD
THANK YOU