(1) In current year business loss can be set off against any business [whether Normal or speculative]
Example
Income from Speculative Business=50000
Loss from Normal Business=10000
These 2 can be adjusted and Net Income form Speculative business=4000
(2) It can be adjusted against any other income
[Except salary income]
(3) Balance can be carry forward for adjustment in next year for maximum 8 years
(4) In next year it can be adjusted against Business income only
Q1
| PARTICULARS | AMT |
| Income from salary | 350000 |
| Income from house property | 150000 |
| Income(Loss) from business – non-speculative | -500000 |
| Income from business 2– non-speculative | 100000 |
| Income from speculative business | 200000 |
| Total | 300000 |
Business loss of -500000 can be adjusted against all Incomes except Income from Salary
| PARTICULARS | AMT | |
| Income from salary (Net) | 350000 | |
| Income from house property | 150000 | |
| Less | ||
| Adjust with Business Loss non speculative | 150000 | 0 |
| PGBP Income | ||
| Income from business 2– non-speculative | 100000 | |
| Less | ||
| Adjust with Business Loss non speculative | 100000 | 0 |
| Income from speculative business | 200000 | |
| Less | ||
| Adjust with Business Loss non speculative | 200000 | 0 |
| GROSS TOTAL INCOME | 350000 | |
Loss available after Set off=
-500000+100000+200000+150000=50000
This can be carry forward till next 8 years but in next year it can be adjusted with Business Income only
Other Points
(5) Even if business discontinued still loss can be carry forward and adjusted against other Business Income
(6) Loss is allowed to same person who incurred the loss except in following cases.
|
CASE |
LOSS INCURRED BY |
LOSS CARRY FORWARD BY |
|
Inheritance |
Person (individual ) |
Son [inheritor] He can carry forward for remaining 8 years |
|
Amalgamation of company |
Amalgamating company |
Amalgamated Co [Provision of section 72 A / 72 AA to be complied ] |
|
Amalgamation of Cooperative bank |
Amalgamating cooperative bank |
Amalgamated cooperative bank [Provision of section 72 AB to be complied ] |
|
Succession of partnership / proprietorship, in to company |
Partnership / proprietorship |
Company [provision of section 47(xiii) and 47(xiv) to be complied |
|
Succession of private co/ unlisted public LTD co, in to LLP |
PVT LTD/ Unlisted public LTD |
LLP |
|
Demerger of company |
Demerged co. |
Resulting co.
|
|
Demerger of cooperative bank |
Demerged cooperative bank |
Resulting
|
