The manner and process of setting-off of losses and the subsequent carry forward of balance losses flow in the following manner:
However, all the above are subject to certain conditions which have been presented in a nutshell.
|
For the Current Assessment Year |
For Subsequent Assessment Year |
Type of loss |
Inter source Adjustment (Sec 70)
(same head of Income) |
Inter Head Adjustment (Sec 71) (Different heads of Income)
|
Carry Forward of Losses and for how many years |
Profit/Income against which carried forward loss can be Set off in subsequent year(s) |
Should the business/ activity continue |
Is it necessary to submit return of loss in time in accordance with Sec 139(1) |
House Property (Sec 71B) |
Allowed |
Allowed |
Allowed for
8 Years |
Income under the head "Income From house Property" |
N.A. |
No |
Capital Gains |
Allowed
(Short Term Capital Losses can be Set Off Against Long Term Capital Gains and Vice Versa)
|
Not Allowed |
Allowed for 8 Years |
Any Income under the head "Capital Gains"
(Short Term Capital Losses can be Set Off Against Long Term Capital Gains and Vice Versa)
|
Not Necessary |
Yes |
Income From Other Sources
(Other than Loss from activity of owing and maintaining race horses
|
Allowed
(Losses cannot be set off against winnings from lotteries, crossword puzzles etc.)
|
Allowed |
Allowed |
N.A. |
N.A. |
No |
Loss from the activity of owing and maintaining race horses
(Sec 74A)
|
Allowed only against income from the activity of owing and maintaining race horses |
Not Allowed |
Allowed for 4 years |
Loss from activity of owing and maintaining race horses can be set off only against income from activity of owing and maintaining race horses |
Yes |
Yes |
Speculation Loss
(Sec 73)
|
Allowed only against Speculation profits |
Not Allowed |
Allowed for 8 years |
Speculation Losses can be set off only against Speculation Profits |
Not necessary |
Yes |