Set Off Losses Against under Another Head Sec 71

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Set Off of Losses under Another Head of Incomes under section 71

Rule

Loss under any head of income except capital loss can be set off against income under any other head including capigal gains (whether long-term or short-term) in the same assessment year.

Exceptions

  • However, loss under any head cannot be set off against income from lotteries, crossword puzzles, races (including horse races) card games and other games of any sort or from gambling or betting.
  • Capital loss (both short term and long term) can be set off against capital gains only and against no other income.
  • Business loss shall not be set off against salary income
  • Loss from a speculation business can be set off against income from any other speculation business.

Section 71(3A) – Restriction on set-off of loss from House Property (Inserted by FA, 2017, w.e.f. 1-4-2018 A.Y. 2018-19)

Where in any AY the net result under the ‘Income from house property’ is a loss and the assessee has income under any other head of income , then the assessee shall not be entitled to set off such loss, to the extent the amount of loss exceeds 2,00,000/-. Hence the set off shall be restricted to the extent of ₹ 2,00,000/-.

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