[FAQs] Income Tax Returns (ITR) | Set-off of Losses
- ITR Week 2024-25|Blog|Income Tax|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 20 June, 2024
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Set off loss against salary income refers to the process of using losses incurred from house property to reduce taxable salary income. According to Section 71 of the Income Tax Act, you can offset up to Rs. 200,000 of house property loss against your salary income in a given assessment year. Any remaining loss can be carried forward to subsequent years.
FAQ 1. I have earned a salary income of Rs. 800,000 and have incurred a loss of Rs. 300,000 from house property. Can I offset this loss against my salary income?
According to Section 71 of the Income Tax Act, losses from house property can be set off against other income. However, there is a limitation on the set-off amount. Specifically, you can only offset a maximum of Rs. 200,000 of your house property loss against your salary income in any given assessment year. Therefore, you can adjust Rs. 200,000 of your house property loss against your salary income, and the remaining Rs. 100,000 loss will need to be carried forward to subsequent years for set-off.
| Read More Inter-head Adjustment on Taxmann.com/Practice |
FAQ 2. I have a long-term capital loss of Rs. 70,000 from the sale of listed equity shares. Can I set off or carry forward this loss?
Section 112A of the Income Tax Act provides a concessional tax rate of 10% on long-term capital gains arising from the sale of certain securities if the gains exceed Rs. 1 lakh. While gains up to Rs. 1 lakh are not taxed, they are not considered exempt income. Consequently, any long-term capital loss from the sale of listed equity shares can indeed be set off against long-term capital gains and carried forward to subsequent years.
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