Section 5 - Substitution of New Sections for Section 70 and 71 - Finance (No. 2) Act, 1962

5. Substitution of New Sections for Section 70 and 71 For section 70 and 71 of the Income tax Act, the following sections shall be substituted, namely : 70. Set off of loss from one source against income from another source under the same head of income. (1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income other than Capital gains is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head. (2)(i) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset. (ii) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset other than a short term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, of any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset. 71. Set off of loss from one head against income from another. (1) Where in respect of any assessment year the net result of the computation under any head of income other than Capital gains is a loss and the assessee has no income under the head Capital gains , he shall subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head. (2) Where in respect of any assessment year the net result of the computation under any head of income other than Capital gains is a loss and the assessee has income assessable under the head Capital gains , such loss may, subject to the provisions of this Chapter, be set off against the income, if any, of the assessee assessable for that assessment year under any other head including income from capital gains relating to short term capital assets as well as other capital assets or, if the assessee so desires, shall be set off only against his income, if any, assessable under any head of income other than Capital gains .