Set off & Carry Forward of Losses -- doubt

794 views 3 replies

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.

Replies (3)

 

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.

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.
 

Thank you for your replies...

 

This was in case of Intra Head (Same source) Adjustments...

What about Inter Head Set off..?

 

If Salary Income is say Rs.1,20,000 and HP Loss after Intra Head adjustment is Rs.70,000 -- how should the answer be presented?  

Income under the head Salary           1,20,000

Income under the head HP                  (70,000) 

                                 OR

Income under the head Salary                 50,000    

after setoff HP Loss

 

Thanks again for your replies.

 

-- Deepa.

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