Question

Mr Deepanshu, a 35 years old Indian citizen and resident in India in the previous year. He is conducting three different business activities (speculative and non-speculative). He also has income and losses from House property, capital gains and other sources. He is confused in setting-off and carry forward of losses from different sources among different heads on intra head and inter head basis. Help and guide him.

Answer 1

Mr. Deepanshu has to assess many restrictions towards his business activities, while making adjustments to profits and losses

• The correct recommendations for Mr. Deepanshu are -
• If Mr. Deepanshu has incurred losses in any year from any source under a different income head, then he is entitled to charge some other source falling under the same head for the loss against income.
• Unless the revenue from a given source such as property or capital gains, it is exempt from tax, otherwise the source loss can not be compensated against any other taxable income.
• He can also weigh the expenditures of his other companies against the revenue of the companies listed
• The long-term capital loss is applicable only for long-term capital gains. Thus, he can offset both long-term capital gains and short-term capital losses against a short-term capital loss.