Scribd Logo
Upload

Welcome to Scribd!

  • 406 views

    Set Off & Carry Forward of Losses

    Uploaded by

    SHIVAM SAHU
    1) Losses from different sources/heads of income can be set off through inter-source and inter-head adjustments under Sections 70 and 71 respectively. 2) Unabsorbed losses and depreciation can be carried forward for future set off as per provisions for different heads of income like business, house property, speculation etc. 3) Speculation losses can be carried forward for 4 years while other business losses can be carried forward for 8 years. There are exceptions for set off and carry forward of losses under different heads.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Set Off & Carry Forward of Losses

    Uploaded by

    SHIVAM SAHU
    406 views16 pages
    1) Losses from different sources/heads of income can be set off through inter-source and inter-head adjustments under Sections 70 and 71 respectively. 2) Unabsorbed losses and depreciation can be carried forward for future set off as per provisions for different heads of income like business, house property, speculation etc. 3) Speculation losses can be carried forward for 4 years while other business losses can be carried forward for 8 years. There are exceptions for set off and carry forward of losses under different heads.

    Original Title

    setoff.ppt

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Losses from different sources/heads of income can be set off through inter-source and inter-head adjustments under Sections 70 and 71 respectively. 2) Unabsorbed losses and depreciation can be carried forward for future set off as per provisions for different heads of income like business, house property, speculation etc. 3) Speculation losses can be carried forward for 4 years while other business losses can be carried forward for 8 years. There are exceptions for set off and carry forward of losses under different heads.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    406 views16 pages

    Set Off & Carry Forward of Losses

    Uploaded by

    SHIVAM SAHU
    1) Losses from different sources/heads of income can be set off through inter-source and inter-head adjustments under Sections 70 and 71 respectively. 2) Unabsorbed losses and depreciation can be carried forward for future set off as per provisions for different heads of income like business, house property, speculation etc. 3) Speculation losses can be carried forward for 4 years while other business losses can be carried forward for 8 years. There are exceptions for set off and carry forward of losses under different heads.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 16

    1

    SET OFF & CARRY FORWARD

    OF LOSSES
    2

    WHY SET OFF & CARRY FORWARD


    • IF THERE IS A LOSS FROM ONE OR MORE
    SOURCES UNDER ONE OR MORE HEADS
    OF INCOME

    • RULES ARE COVERED U/S 70 TO 79


    3

    MODE OF SET OFF & CARRY FORWARD


    STEP 1- INTER SOURCE ADJUSTMENT
    UNDER THE SAME HEAD OF INCOME
    (SEC 70)

    STEP 2- INTER HEAD ADJUSTMENT IN THE


    SAME ASSESSMENT YEAR (SEC 71)

    STEP 3- CARRY FORWARD OF A LOSS


    4

    INTER SOURCE ADJUSTMENT (SEC 70)


    If there is a loss in respect of any source under any
    head of income for any Asst year then it can be set
    off under any other source under the same head

    EXAMPLES
    Business A 100000 House Property X 75000
    Business B 70000 House Property Y (40000)
    Business C (120000)
    Net Result 35000
    Net Result 50000
    5

    INTER SOURCE ADJUSTMENT (SEC 70)


    EXCEPTIONS:-
    • Loss from speculation business
    • Long term capital loss
    • Loss from activity of owning & maintaining race
    horses
    • Loss cannot be set off against winnings from
    lotteries, crossword puzzles, card game etc.
    6

    INTER HEAD ADJUSTMENT (SEC 71)


    When there is loss in respect of any head of
    income for any assessment year then it can be
    set off against income from other heads

    EXAMPLE
    Salary Income 80000
    House Property (30000)

    Net Result 50000


    7

    INTER HEAD ADJUSTMENT (SEC 71)

    EXCEPTIONS:-
    • Loss in a speculation business
    • Loss under the head capital gains
    • Loss from activity of owning &maintaining race
    horses
    • Loss cannot be set off against winnings from
    lotteries, crossword puzzles , card game etc.
    • Business Loss cannot be adjusted against Salary
    Income
    8

    CARRY FORWARD OF LOSS


    Under the act following losses can be carried forward:

    • Loss under head Income from ‘House Property’ (sec


    71B)
    • Loss under head ‘P & G of B or P’ (sec 72 & sec 73)
    • Loss under the head ‘Capital Gains’ (sec 74)
    • Loss from activity of owning & maintaining race horses
    (sec 74A)

    Other remaining losses cannot be carried forward.


    9

    SPECULATION BUSINESS

    Transaction in which a contract for


    the purchase or sale of any
    commodity, including stocks and
    shares, is periodically or ultimately
    settled, otherwise than by the actual
    delivery or transfer of the commodity
    or scrip's.
    10

    Exceptions :
    Contract in respect of -
    •Raw material or merchandise
    Guard against
    •Stocks and shares by a
    price
    dealer or investor fluctuation
    •Member of forward market or a
    stock exchange in the course of
    jobbing or arbitrage
    Speculative business in case of a company:
    Any part of the business of a company consists in the
    purchase and sale of shares of other companies, such
    company shall be deemed to be carrying on a speculative
    business to the extent to which the business consists of
    purchase and sale of such shares.
    11

    CARRY FORWARD & SET OFF OF SPECULATION


    LOSS
    • Speculation loss can be set off only against
    speculative income
    • Loss can be carried forward for 4 yrs.
    • Continuity of business not necessary.
    • Filing of Return of loss should be submitted in
    time
    12

    CARRY FORWARD & SET OFF OF BUSINESS LOSS


    OTHER THAN SPECULATION LOSS
    (SEC 72)

    • Loss carried forward, can be set off only against


    business income
    • Losses can be carried forward by the person who
    incurred the loss (exceptions to rule)
    • Loss can be carried forward for 8 yrs
    • Return of loss should be submitted in time
    • Continuity of business not necessary
    • Carry forward of unabsorbed depreciation, capital
    expenditure on scientific research & family planning
    expenditure
    13

    CARRY FORWARD OF UNABSORBED


    DEPRECIATION (Sec 32(2))
    • No time limit is fixed for the purpose of carry
    forward.
    • In the subsequent year(s) it can be set off against
    any head. except winnings from lotteries,
    crossword puzzles & Salaries
    • Continuity of business not relevant.
    • Following order of priority is followed.
    (1) Current Depreciation
    (2) Brought Forward Business loss
    (3) Unabsorbed Depreciation
    14

    CARRY FORWARD & SET OFF OF


    LOSS & DEPRECIATION SEC (72A)
    Depreciation and Business loss can be
    carried forward by a person who has
    incurred the loss

    Exceptions-
    • Amalgamation of Companies
    • Demerger
    • Conversion of a proprietary concern/firm
    into company
    15

    CARRY FORWARD & SET OFF OF LOSS FROM


    HOUSE PROPERTY (SEC 71B)
    • Applicable from Asst yr 1999-2000
    • Loss can be carried forward for 8 yrs
    • Return of loss need not be submitted in time
    16

    CARRY FORWARD & SET OFF OF LOSS FROM


    ACTIVITY OF OWNING & MAINTAINING
    RACE HORSES (SEC 74A)
    • Continuity of Business necessary
    • Loss can be carried forward for 4 yrs
    • Return of loss should be submitted in time
    • Not applicable for other race animals
    • Allowed only to the extent of stake falls short
    of revenue expenditure

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy