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Income Tax Loss Set Off And Carry Forward Provision

Shreyans Panchal (CA Final Student) (127 Points)

09 April 2025

Loss from house property: 2,50,000
Income from salary 50000
Long term capital gain 2,50,000
Long term capital loss 2,00,000
Short term capital loss 50,000

Q1. Amount of loss to be carried forward
Q2. Taxable Income?
Q3. Can long term capital loss be used to set off Income from House property?
Q4. Amount of House property that can be used for interhead setoff ?

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7335 Points)
Replied 09 April 2025

Given Information - *Loss from House Property*: ₹2,50,000 -

*Income from Salary*: ₹50,000 - *Long-term Capital Gain*: ₹2,50,000

- *Long-term Capital Loss*: ₹2,00,000 - *Short-term Capital Loss*: ₹50,000 Calculating Net Capital Gains -

*Net Long-term Capital Gain*: ₹2,50,000 (long-term capital gain) - ₹2,00,000 (long-term capital loss) = ₹50,000 -

*Net Short-term Capital Loss*: ₹50,000 (short-term capital loss) Setting Off Losses -

*Inter-head Setoff*: Losses from house property can be set off against income from other heads, but there are restrictions on setting off capital losses against income from house property. -

*Long-term Capital Loss*: Long-term capital loss cannot be used to set off income from house property.

Calculating Taxable Income - *Income from Salary*: ₹50,000 -

*Net Long-term Capital Gain*: ₹50,000 - *Loss from House Property*: ₹2,50,000 (can be carried forward for setoff against future income from house property) Answers to Questions

Q1. *Amount of Loss to be Carried Forward*: ₹2,50,000 (loss from house property)

Q2. *Taxable Income*: ₹50,000 (income from salary) + ₹50,000 (net long-term capital gain) = ₹1,00,000

Q3. *Long-term Capital Loss*: Cannot be used to set off income from house property.