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Setoff

It means adjusting loss with Income

 

Example 1

If a person has 2 business,In first business there is profit of 200000 and in second ,there is loss of 80000,

Then loss of 80000 can be setoff adjusted against profit of 20000 and PGBP Income will be 120000

 

Example 2

If a person has loss from house property of 300000 and profit of business of Rs 400000

Then loss of 300000 can be setoff adjusted against PGBP Income of 400000 and Gross total Income will be 100000

 

 

Types of set off

Intra head set off Inter head set off 
It means adjusting loss under One head of Income with Income under Same head.  It means adjusting loss under One head of Income with Income under another head of Income. 
Example:- Adjusting loss from one business with profit under another business. Example :-Adjusting Loss from house Property with business profit.
(Refer Example 1 above) (Refer Example 2 above)

 

 

 

 

  1. Income Tax
  2. Set off and Carry Forward of Losses
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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