Set off of loss under the same head of income - Section 70 - Income Tax - Ready Reckoner - Income Tax

Set off of loss under the same head of income - Section 70 General Rule: The losses from one source of income can be set off against income from another source under the same head of income. The loss in respect of any source of income under any head other than 'capital gains' of income shall be set off against the income from any other source under the same head. Exceptions: In the following cases loss from one source cannot be adjusted against income from other source although it falls under the same head: Losses from Speculation Business: Any loss in respect of speculation business cannot carried on by an assessee, shall be set off only against income of another speculation business. Losses from the activity of owning and maintaining race-horses: It can be set off against the income of such activity and cannot be set off against the income from any other source. Long term Capital loss cannot be set off against short term capital gains. Loss of specified business referred to in Section 35AD : Losses from a specified business will be set off only against profit of specified businesses. But the losses from any other businesses or profession can be set off against profits from the specified businesses. Loss from a source which is exempt: Loss incurred from a source, the income of which is exempt income, cannot be set off against the income from a taxable source Loss on account of lottery, etc.: Loss from any lottery, card games etc. is not allowed to be set off at all against any other income, not even against income of another winnings of lotteries, crossword puzzles, card games etc. Bonus stripping : Provisions pertaining to bonus stripping and dividend stripping to be made applicable to both securities and units (To cover bonus stripping in case if securities Bonus and Dividend stripping in case of REIT, InVIT AIF) [Amended w.e.f. AY 2023-24]