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Set off & Carry Forward of Losses -- doubt

Deepashri Kulkarni (CA - Final) (59 Points)

13 April 2011

Hello Everyone,

This is regarding upcoming IPCC May Exam - Taxation.

When a question is asked to compute Taxable Income or Tax Liability of an individual -- giving all the details of Income from Salary, HP, CG, Business, & IFOS -- do we need to adjust the incomes as per Set off & Carry forward rules and then take the final figures under each head to compute the Taxable Income..?

Or should we do the Set off and Carry Forward only when the specific question is asked..?

Awaiting your thoughts on this... Thank you in advance for your help.

Best Regards,

-- Deepa.

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3 Replies

(Guest)

If in the question set off and carry forward is requried... then you have to adjust the same before calculating the Gross total income. For eg: if there is profit from HOUSE 1 Rs.72000 and loss from House2 (Rs.30000), then Net income from House property will be (72000-30000)=Rs.42000. You will have to do this adjustment even if separately it is not asked for set off and carry forward.

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CA Madhukiran Reddy (CHARTERED ACCOUNTANT) (12714 Points)
Replied 13 April 2011

Originally posted by : vinnzz
	If in the question set off and carry forward is requried... then you have to adjust the same before calculating the Gross total income. For eg: if there is profit from HOUSE 1 Rs.72000 and loss from House2 (Rs.30000), then Net income from House property will be (72000-30000)=Rs.42000. You will have to do this adjustment even if separately it is not asked for set off and carry forward.