Set off and carry forward of losses
This query is : Resolved
01 April 2014
Dear personnel, Can a loss of house property be first set off from long term gain or there is any priority to set off the loss from any other head?
For ex- loss from house property 200000
long term capital gain 300000
salary 400000.
Is there any priorty among salary of long term capital gain?
For ex- loss from house property 200000
long term capital gain 300000
salary 400000.
Is there any priorty among salary of long term capital gain?
01 April 2014
Yes the loss from house property will be first adjusted against the salary income and then against the capital gain.
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14 April 2014
no you are wrong there is no priorty regarding salary or capital gain to set off.
14 April 2014
no you are wrong there is no priorty regarding salary or capital gain to set off.
14 April 2014
no you are wrong there is no priorty regarding salary or capital gain to set off.
15 April 2014
Dear Harshit you mean to say that I should first setoff loss from House property against capital gain and pay tax @ 20 % only on Rs. 100000/- (300000-200000) and slab rate on salary income.If we will follow what you say then the overall tax will be less. But dear do you think IT Dept is stupid. They will first setoff the loss from House property against the normal income which are taxable at slab rate and then against the capital gain as it is taxable at higher rate. As per your example the 20% will be payable on Rs. 300000 (Capital Gain) and slab rate on Rs. 200000 (400000-200000)
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16 April 2014
But if i make some change in my example let us suppose now
salary income = 1500000
LTCG = 250000
loss from house property = 200000
Then your answer must be different because now it is beneficial for IT deptt. to sett off from LTCG because the tax will be more then.
salary income = 1500000
LTCG = 250000
loss from house property = 200000
Then your answer must be different because now it is beneficial for IT deptt. to sett off from LTCG because the tax will be more then.
20 April 2014
In this example also the loss from house property will be setoff against salary income. thus Rs 1300000 (1500000-200000) will be taxable at slab rate and Rs. 250000 will be taxable at 20%.
Now take another example. suppose the salary income =Rs. 100000, LTCG =Rs. 250000 and loss from HP = Rs. 200000. then in this case loss from HP will be first setoff against salary income to the extent of Rs. 100000 (100000-200000) and the balance Rs. 100000 which is still remaining for setoff, will be then setoff against LTCG.
In short loss from HP will first be setoff against the income taxable at NORMAL rate like salary, income from another HP, Income from other sources etc. If still after setoff anything is remaining then it will be setoff against the income taxable at special rates like LTCG.
Now take another example. suppose the salary income =Rs. 100000, LTCG =Rs. 250000 and loss from HP = Rs. 200000. then in this case loss from HP will be first setoff against salary income to the extent of Rs. 100000 (100000-200000) and the balance Rs. 100000 which is still remaining for setoff, will be then setoff against LTCG.
In short loss from HP will first be setoff against the income taxable at NORMAL rate like salary, income from another HP, Income from other sources etc. If still after setoff anything is remaining then it will be setoff against the income taxable at special rates like LTCG.
28 April 2014
but if income tax deptt. is getting more tax by setting off from capital then.
01 May 2014
can you give an example ?
01 May 2014
salary income=2000000
long term capital gain = 250000
loss from house property = 200000
long term capital gain = 250000
loss from house property = 200000
01 May 2014
salary income=2000000
long term capital gain = 250000
loss from house property = 200000
long term capital gain = 250000
loss from house property = 200000
01 May 2014
Again the same ans. setoff the loss against salary income first (Rs. 2000000-200000)and LTCG (rs. 250,000) will be taxed @20% .
This is how you have to calculate tax as per IT laws irrespective of amount of tax.
This is how you have to calculate tax as per IT laws irrespective of amount of tax.
03 May 2014
but you were saying that income tax deptt. is not a fool. they will calculate acordingly from which they will get more tax.
04 May 2014
I am not telling that IT dept having the option of calculating the tax liability by two methods. Tax is calculated as per what I told you above only.Initially you told to setoff loss from HP against Capital gain first which us wrong. Irrespective of tax liability the method of computation is one only.
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04 May 2014
Right from beginning I am telling you to first setoff loss from HP against salary and then against Capital Gain. I hope I made you clear.
05 May 2014
but in between you mean to say ki from where they will get more tax they will set off from there only.
05 May 2014
and secondly if we will sett off from first salary then income tax deptt. will get less tax . will they afford this. dats why i am asking from beginning is there any notification or section which says first loss be set off from salary.
05 May 2014
i am just requesting you to provide the link of that provision where this is stated if any.
05 May 2014
You can try yourself also. Just go to below link.
https://incometaxindiaefiling.gov.in/
here download java utility for ITR 2 for AY 13-14 (I am telling you AY 13-14 Bcoz utility for ITR 2 for AY 14-15 is yet not made available on site. method of computing the tax liability will remain same.) Fill up the figures. You will get your answer.In case you need any help do let me know.
https://incometaxindiaefiling.gov.in/
here download java utility for ITR 2 for AY 13-14 (I am telling you AY 13-14 Bcoz utility for ITR 2 for AY 14-15 is yet not made available on site. method of computing the tax liability will remain same.) Fill up the figures. You will get your answer.In case you need any help do let me know.
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