Set off of losses and carry forward of losses is tedious subject for taxpayers and mostly confusing but with the help of chart given below,it is very easy to understand all the heads ,inter heads adjustment in very easy manner.In this chart adjustment in the previous year and adjustment in next year if possible has been shown. Hope it would be helpful to you to under stand the set off and carry forward concept easily.
CARRY FORWARD & SET -OFF OF LOSSES: | Set-off During the year | Carry Forward & Set - off Next year(s) | ||||
Same Head | Another head | Against | C/F | Years | Agst Profits From | |
Yes | Yes | - | Yes | 8 years | same head | |
2. Speculation Business | Yes | No | From Speculation Profits | Yes | 4 years | Same/ another Speculation Business |
Unabsorbed Depreciation / Cap Exp on SR/FP | Yes | Yes | any income | Yes | No limit | any income (other than salary) |
Non-speculative Business or Profession | Yes | Yes (except salary) | Yes | 8 years | same head | |
3. Long Term Capital Losses | Yes | No | LTCG | Yes | 8 years | LTCG |
Short Term Capital Losses | Yes | No | STCG/LTCG | Yes | 8 years | STCG/LTCG |
4. Owning / Maintaining race horses | Yes | No | same item | Yes | 4 years | same item |
5. Income from Other Sources (except if exempt) | Yes | Yes | NA | No | NA | NA |
6. Specified Business u/s 35AD | Yes | No | Specified Business Profits | Yes | No Limit | |