It is allowed in all cases  except the following −

Exceptions

(a) Loss from speculation business can be adjusted only against income from speculation business [Section 73]

[i.e. Loss from speculation business cannot be adjusted against profit of normal business, however opposite is possible].

 

(b)Loss from specified business under Section 35AD can be adjusted against only against any other specified business under Section 35AD

[i.e. it cannot be adjusted against normal business]

 

(c) Loss from activity of owning maintaining race horses can be set off against income from owning and maintaining race horses.

 

(d) Loss from lottery / cross word puzzle games cannot be adjusted against income from lottery etc. 

 

(e) Loss from exempt source cannot be adjusted against income from a taxable source i.e. if income is exempt its loss can’t be setoff

 

(f) LTCL can be set off against only LTCG

[However STCL can be set off against both LTCG & STCG]

 

  1. Income Tax
  2. Set off and Carry Forward of Losses
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Davneet Singh's photo - Teacher, Computer Engineer, Marketer
Davneet Singh
Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 8 years. He provides courses for Maths and Science at Teachoo. You can check his NCERT Solutions from Class 6 to 12.