Set off and carry forward of loss

Intra head adjustment means set off of loss against the same head of income.

Head of Income	Type of loss incurred	Current year loss set off		Brought forward losses can be set off	Time limit for carry forward of losses (in years)	Whether return should be filed before the due date for carry forward of loss?
		Intra Head Adjustment	Inter Head Adjustment
Income from House Property	House Property Loss	Allowed	Allowed upto a maximum of 2,00,000/-	Against Income from house property only	8	No
Profits and gains of business or profession	Unabsorbed Depreciation, Unabsorbed Capital Expenditure on Scientific Research and Unabsorbed Capital Expenditure on Promoting Family Planning	Allowed	Allowed except on income from salaries	Any head of Income other than salary	No time limit	No
	Speculative Business Loss	Against profit from speculative business only	Not Allowed	Against speculative business income only	4	Yes
	Specified Business Loss (Section 35AD)	Against profit from specified business only	Not Allowed	Against profit from specified business only	No time limit	Yes
	Any Other Business Loss	Allowed	Allowed except on income from salaries	Against Profits and gains of business or profession	8	Yes
Capital Gain	Short Term Capital Loss	Against Short term capital gain / Long term capital gain	Not Allowed	Against Short term capital gain / Long term capital gain	8	Yes
	Long Term Capital Loss	Against Long term capital gain only	Not Allowed	Against Long term capital gain only	8	Yes
Income from Other Sources	Loss from the Business of Owning and Maintaining Race Horses	Profit from similar activity only	Not Allowed	Profit from similar activity only	4	Yes

Note: Loss cannot be set off against casual income u/s 115BB and black money income u/s. 68, 69, 69A, 69B, 69C & 69D

• Yes, we can set off only house property loss against income from salary.
• Such loss can be set off only upto Rs. 2,00,000

• Loss u/s 115BB (i.e. casual income)
• Loss from exempt source (eg. Agricultural loss)

• Current year’s Depreciation
• Current year’s loss
• Brought forward business loss
• Unabsorbed Depreciation of previous year
• Unabsorbed Capital Expenditure on scientific research
• Unabsorbed Capital Expenditure on Promoting Family Planning of previous year

• It is a special provision for carry forward and set off losses in case of closely held companies
• Loss incurred in earlier years shall be carried forward & set off in PY only if,
  • At least 51% of voting power are held by the same shareholders, on the last day of the year in which loss if incurred and on last day of PY in which loss will be set off
• Non applicability of section 79
  • In respect of set off of unabsorbed depreciation
  • Where the change in shareholding is due to death of shareholder or by way of gift to relative
  • Where change in shareholding is due to resolution plan approved under Insolvency and Bankruptcy code, 2016.