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Set off of loss from another head of income – Section 71

After setting off of losses under the same head, if loss remains unabsorbed then the remaining loss can be sett off from income from other heads.The following are exemptions to the aforesaid rule-

  • Loss In a speculation business cannot be set off from any other income.
  • Capital loss cannot be set off from any income under other head.
  • Any loss from any specified business u/s 35AD cannot be set off against other head of income.
  • Loss from activity of owning and maintaining horse racecannot be set off against other head of income.
  • Loss from business/profession cannot be set off against income under the head “salaries”
  • Loss cannot be set off against winning from lotteries, crossword puzzles etc. [Section 58(4)] – a loss cannot be set off against winnings from lotteries, crossword puzzles, races including horse races, card games or games of any other sort or gambling or betting of any form or nature.
  • Where income from a particular source is exempt from tax, loss from such a source cannot be set off against income chargeable to tax.

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