Carry forward loss:
Forwarding present year loss to future years 8 years from the present assessment year.
Ex: loss from house property
Loss from business or profession(nonspeculative)
Cannot forward return filed after the due date but for house property (belated filing with carrying forward loss possible).
Not necessary to continue business in future years.
For speculative business up to 4 years, we can carry forward the loss.
Section 35AD specified the business loss
No time limit for carry forward years.
Setoff only against section 35ad business list.
Has to file the return within the original due date.
Capital losses
Carry forward up to 8 years and setoff against only capital losses.
Shortterm capital losses can be adjusted both short-term and long-term capital losses. But long-term capital losses can be adjusted against only Long term capital losses.
Loss from owning maintaining racehorses
carry forward up to 4 years, has to file within original due date When the loss incurred.
Set off losses:
Adjusting losses against another business or profit.
Intra head:
adjusting 1 specified business profit to another loss from a 2nd specified business.
Income from business
Inter head setoff losses
Set off against other heads of income
Ex: loss from house property & or loss from business can be sett off against income from salary head
Inter head can’t setoff following
speculative, racehorses,
capital losses, specified business list 35ad losses.
Can’t be set loss following
speculative business
Owning and maintaining of Racehorses
Capital losses
Section 35 AD specified business list 150% deduction available on capital and revenue.
The taxpayer cannot adjust loss from the exempted sourced from taxable sources.
4 types of income heads
- Salary
- Business /profession
- House property
- Other sources FD interest insurance maturity, capital gains, etc.