Professional Documents
Culture Documents
Set Off and Carry Forward of Losses and
Set Off and Carry Forward of Losses and
• The losses from one sources of income can be set off against income from
another sources under the same head of income.
• For ex: loss of Business ‘A’ can be set off against profit from Business ‘B’ where
Business ‘A’ is one source and Business ‘B’ is another source and the common
head of income is “Business”.
EXCEPTIONS TO INTRA-HEAD SET OFF
1. Losses from the speculative business will only be set off against the
profit of speculative business. One cannot adjust the losses of
speculative business with the income from any other business or
profession.
2. Loss from any activity of owning and maintaining race-horse will be
set off only against the profit from the activity of owning and
maintaining race-horse.
3. Long term capital loss will only be adjusted towards long term capital
gains. Interestingly, a short term capital loss can be set off against
long term capital gain or short term capital gain.
4. Losses from a specified business will be set off only against profit of
specified business. But the losses from any other business or profession can
be set off against profits from the specified business.
INTER-HEAD SET OFF
• After intra-head adjustments, the tax payers can set off remaining losses
against income from another heads.
• Ex: Loss from house property can be set off against income from salary.
INTER-HEAD SET OFF OF LOSSES
1. Loss from house property can be set off against income under any head.
2. Business loss other than speculative business can be set off against any
head of income except income from salary.
LOSSES CANNOT BE SET OFF AGAINST ANY OTHER HEAD OF
INCOME
• Capital losses
1. can be carried forward up to next 8 assessment years from the
assessment year in which the loss was incurred.
2. long term capital losses can be adjusted only against long term capital gains.
3. short term capital losses can be set off against long term capital gains and
short term capital gains.
4. cannot be carried forward if the return is not filed within the original due
date.
RULES TO CARRY FORWARD FOR DIFFERENT HEADS OF
INCOME
• Deductions are the exemptions on the amount taxable as per Income Tax Act.
They are the Investments made by the persons for them, their Family & their
parents.
• Income Tax Deduction Available to Individual and HUF under Section 80C to
Section 80U of Income Tax Act, 1961.
Sections Income Tax Deduction for FY Who can Invest? Maximum deduction available for
2022-23(AY 2023-24) FY 2022-23 (AY 2023-24)
80 CCD (1) Atal Pension Yojana and National Pension Scheme Individual
Contribution
80 CCD (1 B) Atal Pension Yojana and National Pension Scheme Individual Up to Rs 50,000
Contribution (additional deduction)
80 CCD (2) National Pension Scheme Contribution by Employer Individual Amount Contributed
or 14% of Basic Salary + Dearness
Allowance (in case the employer is
Government)
10% of Basic Salary+ Dearness
Allowance(in case of any other
employer)- Whichever is lower
Sections Income Tax Deduction for FY Who can Invest? Maximum deduction available for
2022-23(AY 2023-24) FY 2022-23 (AY 2023-24)
80 D Medical Insurance Premium, preventive health Individual Up to Rs 1,00,000
checkup and Medical Expenditure Or HUF
80 DD Medical Treatment of a Dependent with Disability Individual Normal Disability (atleast 40% or
Or HUF more but less than 80%): Rs
75000/-
Severe Disability (atleast 80% or
more) : Rs 125000/-
80 DDB Medical expenditure for treatment of Specified Individual Senior Citizens: Upto Rs 1,00,000
Diseases Or HUF Others: Upto Rs 40,000
80 E Interest paid on Loan taken for Higher Education Individual No limit (Any amount of interest
paid on education loan)upto 8
assessment years
80 EE Interest paid on Housing Loan Individual Upto Rs 50,000 subject to some
conditions
80 EEA Interest Paid on Housing Loan Individual Upto Rs 1,50,000/- subject to
some conditions
80 EEB Interest paid on Electric Vehicle Loan Individual Upto Rs 1,50,000 subject to some
conditions
Sections Income Tax Deduction for FY Who can Invest? Maximum deduction available for
2022-23(AY 2023-24) FY 2022-23 (AY 2023-24)
80 G Donation to specified funds/institutions. All Assessee (Individual, HUF, 100% or 50% of the Donated
Company, etc) amount or Qualifying limit,
Allowed donation in cash up to
Rs.2000/-
80 GG Income Tax Deduction for House Rent Individual Rs. 5000 per month
Paid 25% of Adjusted Total Income
Rent paid - 10% of Adjusted Total
Income- whichever is lower
80 GGA Donation to Scientific Research & Rural All assessee except those who 100% of the amount donated.
Development have an income (or loss) from Allowed donation in cash up to
a business and/or a profession Rs.10,000/-
80 TTA Interest earned on Savings Accounts Individual Or HUF (except senior citizen) Up to Rs 10,000/-
80 TTB Interest Income earned on Individual (60 yrs or above) Upto Rs 50,000/-
deposits(Savings/ FDs)
Classification of Donations:
1. No limit donations- whole amount qualifies for deduction.
2. With limit donations- Qualifying amount shall not exceed 10% of GTI after
making certain deductions.
80G- DONATION TO CERTAIN FUNDS, CHARITABLE
INSTITUTIONS ETC.
• Qualifying limit shall not exceed 10% of adjusted gross total income
Particulars Amount
Gross total income XXX
Less: STCG u/s 111A XXX
Less: LTCG XXX
Less: Deductions u/s 80C to 80U (except 80 G) XXX
Adjusted GTI XXX
Example:
• NO LIMIT DEDUCTION
Deduction=100% of Donation
If donation= Rs. 50,000
Deduction allowed = Rs. 50,000 (50,000 x 100%)
NO LIMIT DEDUCTION Total deduction
Deduction=50% of Donation allowed = Rs. 80,000
If donation= Rs. 60,000
Deduction allowed = Rs. 30,000 (60,000 x 50%)
Particulars Amount
Note: In-kind contributions such as food, material, clothes, medicines etc., and
donations of above Rs 2,000 in case they do not qualify for deduction under
Section 80G. Donations above Rs 2,000 should be made in any mode other than
cash to qualify under Section 80G.
CLAIM THE DEDUCTION UNDER SECTION 80G
9. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation, and Multiple Disabilities.
10. National Sports Fund
11. National Cultural Fund
12. Fund for Technology Development and Application
13. National Children’s Fund
14. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any
State or Union Territory
15. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force
Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
16. The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6,
1993
17. Chief Minister’s Earthquake Relief Fund, Maharashtra
18. Any fund set up by the State Government of Gujarat exclusively for
providing relief to the victims of the earthquake in Gujarat
19. Any trust, institution or fund to which Section 80G(5C) applies for
providing relief to the victims of the earthquake in Gujarat (contribution
made between January 26, 2001, and September 30, 2001)
20. Prime Minister’s Armenia Earthquake Relief Fund
21. Africa (Public Contributions – India) Fund
22. Swachh Bharat Kosh (applicable from FY 2014-15)
23. Clean Ganga Fund (applicable from FY 2014-15)
24. National Fund for Control of Drug Abuse (applicable from FY 2015-16)
LIST OF DONATIONS ELIGIBLE FOR 50% DEDUCTION WITHOUT QUALIFYING LIMIT