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SET OFF AND CARRY FORWARD LOSSES

  SET OFF AND CARRY FORWARD LOSSES Specific provisions have been made in the Income-tax Act, 1961 for the set-off and carry forward of losses. In simple words, “Set-off” means adjustment of losses against the profits from another source/head of income in the same assessment year. If losses cannot be set-off in the same year due to inadequacy of eligible profits, then such losses are carried forward to the next assessment year for adjustment against the eligible profits of that year. The maximum period for which different losses can be carried forward for set-off has been provided in the Act. INTRA HEAD ADJUSTMENT Intra-head Adjustment  refers to the process of setting off a loss from one  source  of income against income from another  source  under the  same head  of income in the same assessment year. EXCEPTIONS 1)         LONG TERM CAPITAL LOSS: Ø   Long term capital loss can be set off only ag...
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CLUBBING OF INCOME

 CLUBBING OF INCOME:  INCOME OF OTHER PERSONS TO BE INCLUDED IN AN ASSESSEE’S TOTAL INCOME 1.         Transfer of income without transfer of an assets(Sec 60) Such income is taxable in the hands of transferor 2.         Revocable transfer of assets by an assesse to another person (sec 61) Such income is taxable in the hands of transferor 3.         Irrevocable transfer of asset (Sec 62) Such income is taxable in the hands of transferee 4.         Income of an individual’s to include income of spouse, minor child (Sec 64) Minors’ Income Ø   All the incomes of a minor child is included in the parent’s income. Ø   It will be clubbed with father or mother whose aggregate income )before clubbing) is higher. Ø   If parents are separated, clubbed with a parent who maintains him. Minor income cannot be clubbe...
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EXEMPTED Government securities' Income

    EXEMPTED Government securities' Income  Plan Certificates a)       National plan certificates (10 Years) b)       National Plan savings certificates(12 years) Post office Savings a)       Post office National Savings certificates b)       Post Office Savings Bank Accounts interest is exempt upto Rs.3,500 (Rs.7,000 in case of joint account) c)       Public Account of post office saving Account (interest upto Rs.5,000) d)      Post office CTD e)       Post office fixed deposits f)        Post office cash certificates Fixed deposits                                 i.    ...
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Ex.36. Ms.Jayashankari’s investments during the year ended 31st March,2025 consisted of the following:

  Ex.36. Ms.Jayashankari’s investments during the year ended 31 st March,2025 consisted of the following: a)       Rs.25, 000, 7% Government Securities. b)       Rs.15, 000, 8% Agra Municipal Bonds c)       Rs.10,000, 7 years Post Office National Savings Certificates d)      Rs.10,000, 6% securities issued by a Foreign Government. Find out income from other sources.     Rs. Rs. 1 7% Government securities (25,000x7/100)   1,750 2 8% Agra Municipal Bonds ( 15,000x8/100)   1,200 3 Post office Deposits   Nil 4 6% Securities by Foreign Government   600   Total Income From Other Sources   3,550
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