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 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).
(2A) Notwithstanding anything contained in sub-section (1)
or sub-section (2), where in respect of any assessment year,
the net result of the computation under the head “Profits
and gains of business or profession” is a loss and the
assessee has income assessable under the head “Salaries”,
the assessee shall not be entitled to have such loss set off
against such income.
(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.
(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.
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