[FAQs] Income Tax Returns (ITR) | Set-off of Losses

  • Blog|Income Tax|ITR Week 2023-24|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 5 July, 2023

set off and carry forward of losses

FAQ 1. I have earned a salary income of Rs. 800,000 and have a loss of Rs. 300,000 from house property. Can I set off such a loss against my salary income?

Section 71 allows the set-off of losses from house property against any other income. However, losses under the head ‘house property’ shall be allowed to be set off only to the extent of Rs. 200,000 in any assessment year. Thus, only a loss of Rs. 200,000 can be adjusted against your salary income and a loss of Rs. 100,000 shall be carried forward for set-off in subsequent years.

(Read More: Inter head Adjustment on taxmann.com/practice)

FAQ 2. I have a long-term capital loss of Rs. 70,000 from the sale of listed equity shares. Whether the same can be allowed to be set off or carried forward?

Tax is levied under Section 112A at the concessional rate of 10% on long-term capital gains arising from the transfer of said securities if the long-term capital gain exceeds Rs. 1 lakh.

The new section 112A provides for taxability of long-term capital gains above Rs. 1 lakh. As gain up to Rs. 1 lakh is not chargeable to tax, it couldn’t be called exempt income. Therefore, any long-term capital loss arising from the sale of listed equity shares can be set off and carried forward.

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