Income-tax Act,1961
Act No : 43
Section :
Set off of loss from one head against income from another 4
3[71. Set off of loss from one head against income from another 4 (1) Where in respect of any assessment year the net result of the ----------------------------------------------------------------------- 1 The words 'other than capital gains' omitted by the Finance Act, 1987, w.e.f. 1-4-1988. 2 Prior to the omission, sub-section (2) read as under: "(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, if 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." 3 Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Prior to the substitution, section 71 read as under: "71. Set off of loss from one head against income from another.- Where in respect of any assessment year, the net result of the computation under any head of income is a loss, the assessee 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." The above section was substituted for the following by the Finance Act, 1987, w.e.f. 1-4-1988: "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- (i)against the income, if any, of the assessee assessable for that assessment year under any head including income assessable under the head "Capital gains" (whether relating to short-term capital assets or any other capital assets), or (ii)if the assessee so desires, only against his income, if any, under the head 'Capital gains", in so far as such income relates to short-term capital assets, and income under any other head. (3) Where in respect of any assessment year the net result of the computation under sections 48 to 55 in respect of capital gains relating to short-term capital assets is a loss and the assessee has income assessable under any head of income other than "Capital gains", the assessee shall, subject to the provisions of this Chapter, be entitled to have such loss set off against the income aforesaid." Earlier, section 71 was substituted by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962 and sub-section (2) was substituted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968. 1.327 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 his income, if any, assessable for that assessment year under any head of income including the head "Capital gains" (whether relating to short-term capital assets or any other capital assets). (3)Where in respect of any assessment year, the net result of the computation under the head "Capital gains" is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.] 1[(4) Where the net result of the computation under the head "Income from house property" is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.] 2[71A. Transitional provisions for set off of loss under the head "income from house property" Where in respect of the assessment year commencing on the 1st day of April, 1993 or the 1st day of April, 1994, the net result of the computation ---------------------------------------------------------------------- 1 Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Prior to the substitution, subsection (4), as inserted by the Finance Act, 1992, w.e.f. 1-4-1993, read as under: "(4) Notwithstanding anything contained in sub-sections (1) and (2), where in respect of any assessment year the net result of the computation, in relation to any property [other than the property referred to in sub-clause (i) of clause (a) of sub-section (2) of section 23], under the head "Income from house property" is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head." 2 Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Prior to the substitution, section 71A, as inserted by the Finance Act, 1992, w.e.f. 1-4-1993, read as under: "71A. Carry forward of losses under the head "Income from house property".-Where in respect of any assessment year, the net result of the computation under the head "income from house property" is a loss, the loss in so far as it relates to interest on borrowed capital referred to in clause (vi) of sub-section (1) of section 24 shall be carried forward by the assessee to the following assessment year or years and set off against the income under that head." ---------------------------------------------------------------------- 1.328 under the head "Income from house property" is a loss, such loss in so far as it relates to interest on borrowed capital referred to in clause (vi) of subsection (1) of section 24 and to the extent it has not been set off shall be carried forward and set off in the assessment year commencing on the 1st day of April, 1995, and the balance, if any, in the assessment year commencing on the 1st day of April, 1996, against the income under any head.]
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