Set off Loss from Business Capital Gain House Property

Under Income Tax Act, Can Business Loss be Set off against Capital Gain. Can it be Set off against both Long Term Capital Gain and Short Term Capital. Business loss set off means, we erase the loss accrued from our Non-Speculative business against Incomes from other Heads. In this Article, we will discuss on issues like To what Heads can our Business Loss be Set Off, Will the answer be different if the loss is from Speculative Business etc.

Business Loss Set Off Against Salary Income

The Straight forward answer is, Business Loss cannot be set off against Income from Salary. Infact, loss from no other Head can be set off against Salary Income.

Set Off under same Head

Loss from Non-Speculative Business can be set off against the income from Speculative Business. It can be set off against income from other speculative business.

For example, Any loss from Construction Business can be set off against income from Textile business. It can also be set off against income from Share Trading. However, any loss from Share trading cannot be set off against income from Construction business.

Set Off Against Capital Gains and HP

Any Current Year Loss from Business can be set off against either Long Term Capital Gain or Short Term Capital Gain.

Similar, current year business loss can be set off against House Property.

Set Off Against Capital Gains and HP

 

Loss from LTCG

Any loss from Long Term Capital Gains from the current year can be set off only against income from other LTCG but not any Short Term Capital Gain.

Loss from STCG

Any loss from Short Term Capital Gain from the current year can be set off against LTCG.

Loss From House Property

Any Loss incurred from House Property can be set off against Income from Long Term Capital Gain and also Short Term Capital Gain.

For example, loss from one house property can be adjusted against the profits from another house property in the same assessment year.

Any loss under the head, Income from house property‟ can be set off against any income under any other head in the same assessment year.

However, if after such set off, there is still any loss under the head “Income from house property”, then the same shall be carried forward to the next year.

Set Off Illustration

Mr. Lalith submits the following particulars pertaining to the A.Y.2016-17. Compute the taxable income of Mr.Lalith for the A.Y.2016-17.  [Answer: Rs.3,30,000]

Particulars Amount
Income from salary 4,00,000
Loss from self-occupied property (-)70,000
Business loss (-)1,00,000
Bank interest (FD) received 80,000
Updated: April 16, 2018 — 5:41 am

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