Tax Talks

Tax Query: How can I set off business loss against other income sources?

I have a loss from the business of trading in futures and options. I also have income from bank FD interest and freelancing services. While filing my income tax return, can I set off the business loss from my other income sources?

The loss from trading in futures and options (F&O) is a loss from regular business. You can set off the F&O loss against income from other business or profession which includes freelancing income. You can set off the balance loss from other incomes except for income from salary. Your FD interest is taxable under the head ‘Income from Other Sources’. In your case, you can set off the F&O loss from income from other sources. The balance loss if any, is eligible for a carry forward for eight succeeding years. 

Do note that you can set off the losses carried forward only against business income in the eight succeeding years.

Also Read: Tax Query: Which data can I report in ITR by interchanging PAN with Aadhaar?

I am paying interest on a housing loan for my self-occupied property, and for another property let-out. My income consists of income from house property, salary and other sources. Can I set off the loss from self-occupied property against the income from the let-out property and my salary?

The interest deduction available for a self-occupied property is up to Rs 2 lakh. Accordingly, the maximum loss from a self-occupied property is Rs 2 lakh. You can set off the loss from self-occupied property against income from the let-out property. The net income will be your income from house property. In case of a loss, you can set-off the house property loss up to Rs 2 lakh from your income, such as salary or any other income. The balance loss, if any, is eligible for carry-forward for eight succeeding years.

Do note that you can set off the losses carried forward only against income from house property in the eight succeeding years.

For any clarifications/feedback on the topic, please contact the writer at

sweta.dugar@cleartax.in

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