Current Year Income / (Loss)
Enter positive value for profit/income, and negative value for loss (e.g. -50000).
Inter-head set off max limit is -2,00,000.
Cannot set off against Salary.
Set Off Computation
Gross Total Income (After Set Off)
₹0
Losses to be Carried Forward (Next Year)
Crucial Rule Reminder
- 🚫 You CANNOT carry forward Capital or Business losses if you file your ITR late. (Section 139(3)).
Intra-Head & Inter-Head Set Off Matrix
Under the Income Tax Act (Sections 70 and 71), taxpayers are allowed to adjust their losses against their incomes to reduce the overall tax burden. This happens in two stages: First, within the same head (Intra-head), and then against other heads (Inter-head).
Master Rules Table (2026)
| Type of Loss | Can be Set-Off Against (Same Year) | Carry Forward Years limit |
|---|---|---|
| House Property Loss | Any head of income (Max limit ₹2 Lakhs for inter-head) | 8 Years (against HP only) |
| Normal Business Loss | Any head of income EXCEPT Salary | 8 Years (against Biz only) |
| Speculative Business Loss | ONLY Speculative Business Income | 4 Years (against Spec only) |
| Short-Term Capital Loss (STCL) | STCG or LTCG | 8 Years (against CG only) |
| Long-Term Capital Loss (LTCL) | ONLY LTCG | 8 Years (against LTCG only) |
| Loss from owing Racehorses | ONLY income from owing Racehorses | 4 Years |
Key Logic in our Calculator
- Intra-Head First: The system first tries to adjust losses internally (e.g. STCL against LTCG).
- House Property Limit: If HP loss > 2L, only 2L is adjusted against Salary/Business, rest is carried forward immediately.
- Business vs Salary Protection: Business losses are adjusted against Capital Gains or Other Sources, but never against Salary.
- Capital Loss Isolation: Capital losses remaining after intra-head adjustment are strictly carried forward. They don't touch Salary or Business profits.
Frequently Asked Questions
1. What is the rule for setting off House Property loss?
Loss from House Property can be set off against income from any other head (like Salary, Business, or Capital Gains) up to a maximum limit of ₹2,00,000 in the same year. Any remaining loss can be carried forward for 8 years, but then it can only be set off against House Property income.
2. Can I set off Business Loss against my Salary?
No. Under the Income Tax Act, business losses (non-speculative) can be set off against any other head of income EXCEPT Salary.
3. Can Short Term Capital Loss (STCL) be set off against Long Term Capital Gain (LTCG)?
Yes! STCL can be set off against both STCG and LTCG. However, LTCL can ONLY be set off against LTCG. You cannot use LTCL to reduce your STCG tax.
4. Can Capital Losses be set off against Salary or Business income?
No. Any loss under the head 'Capital Gains' (whether short-term or long-term) can ONLY be set off against 'Capital Gains'. It cannot be adjusted against Salary, Business, or Other Sources.
5. How long can I carry forward my business losses?
Normal business losses can be carried forward for 8 assessment years. Speculative business losses can be carried forward for only 4 assessment years. Specified business losses under Section 35AD can be carried forward indefinitely.
6. Is filing ITR on time mandatory to carry forward losses?
Yes, absolutely! Except for House Property loss and Unabsorbed Depreciation, all other losses (Business, Capital Gains) CANNOT be carried forward if the Income Tax Return (ITR) is filed after the due date.
7. Can speculative loss be set off against normal business income?
No, loss from a speculative business (e.g., intraday stock trading) can ONLY be set off against profit from another speculative business.
8. What about unabsorbed depreciation?
Unabsorbed depreciation can be carried forward indefinitely (for infinite years) and can be set off against any head of income except Salary.
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