TL Setoff & Carry Forward

Rules of Set Off and Carry Forward

Set Off and Carry Forward of Losses

When the net result of any source of income is loss, it can be set off against income from any other source, subject to the following:

Head of Income	Source	Intra Head Adjustment u/s 70	Inter Head Adjustment u/s 71	Carry Forward
Income from House Property	Any	With any income under the same head	With any income under other head	Yes
Profit & Gains of Business or Profession	Speculative	With Speculative income only	No Adjustment	Yes
	Non-speculative	Any income under the head	With any income under other head except salary	Yes
	Unabsorbed Depreciation	Any income under the head	With any income under other head except salary	Yes
	Unabsorbed expenditure u/s 35AD	No Adjustment	No Adjustment	Yes
Capital Gain	Long Term	With Long Term Capital Gain	No Adjustment	Yes
Capital Gain	Short Term	Any Capital Gain	No Adjustment	Yes
Income from Other Sources	Owning and Maintaining Race Horse	Income from such activity	No Adjustment	Yes
	Other	With any income under the same head	With any income under other head	No

Notes:

No loss can be set off against winning from lotteries, crossword puzzles, races, card games, gambling or betting, etc. [Sec. 58(4) & 115BB]
Wherever reference is given for unabsorbed depreciation, it includes reference to unabsorbed capital expenditure on scientific research and unabsorbed capital expenditure on promotion of family planning among employees.

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