What is Speculative Business Loss

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Loss of Speculative Business can be adjusted against income from Speculation Business only   (i.e. it cannot be adjusted against Normal Business)

  • If any loss remaining it can be carry forward against income from Speculation Business
  • Carry forward a llowed for 4 years maximum.

              Loss of AY 2016-17 (FY 2015-16) can be carry forward till AY 2020-21 (FY 2019-20) maximum

  • It is not necessary that same speculation business continues in the future period.

 QUESTION 1

What is the total income chargeable to tax for the A.Y.2016-17?

Particulars Amount
Loss from Speculative Business 1 -100000
Profit from Speculative Bsiness 2 30000
Profit from Normal Busines 3 80000
Total profit earned 10000
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 QUESTION 2

Suppose next year(AY 2017-18),profit earned as follows

Particulars Amount
Loss from Speculative Business 1 -30000
Profit from Non Speculative Business 2 50000
Profit from Normal Busines 3 70000
Total profit earned 90000
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  1. Income Tax
  2. Set off and Carry Forward of Losses
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
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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