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Saturday, May 11, 2013

For June 2013 ICWAI Stage I Examination (Paper 7): Master Chart of Set-off and Carry forward of Losses


Heads of Income
Set Off During the Same A/Y
Carry Forward  of Losses
Same Head
(Sect. 70)
Another Head
(Sec. 71)
Against which Head
Carry Forward
Years
Against which Head
1. Salary
Since No chances of Loss, set off and carry forward of losses is not applicable
2. House Property
YES
YES
Any Head Except Casual Income
YES
8
SAME HEAD
3. PGBF
YES
YES
(Including Speculative Business)
Any Income Excluding Salary & Casual Income
YES
8
SAME HEAD
(Including Speculative Business)
4. Long Term Capital Gain(LTCG)
YES
NO
LTCG
YES
8
LTCG
5. Short Term Capital Gain(STCG)
YES
NO
LTCG/STCG
YES
8
LTCG/STCG
6. Income from other sources
YES
YES
ANY
Not Applicable (NA)
NA
NA
7. Speculative Loss
YES
NO
Speculative Gain
YES
4
Speculative Gain
8. Unabsorbed Depreciation
YES
YES
ANY INCOME
YES
NO Limit
ANY INCOME
9. Maintenance of race horses
YES
NO
Same Item
YES
4
Same Item
10. Specified Business U/S 35AD
YES
NO
Specific Business
YES
NO Limit
Any Specific Business
11. Loss in respect of Casual Income
Cannot be set off at all
12. Loss from exempted sources
e.g. agricultural
YES
NO
Agricultural income
Cannot Be Carry Forward

Note:
1.       No deduction for expenses can be claimed against casual income
2.       For any loss to be carried forward and set-off against the income of a subsequent year the return of such loss must be filed under sec. 139. If no return is file for the year in which the loss was incurred, the right to carry forward the loss is lost.
3.       Order in which current and brought forward losses are to be adjusted:
Ø  Current depreciation
Ø  Capital expenditure on scientific research
Ø  Current loss of another business
Ø  Brought forward losses of earlier years (Oldest loss can be adjusted first)
Ø  Brought forward unabsorbed depreciation
Ø  Brought forward unabsorbed capital expenditure on scientific research.