Set off and carry forward of losses

Hi Team,

I have below question,

FY21-22 - Loss of 1L in non-speculative business, so filed ITR before due date.
FY22-23 - Profit of 1.5L from Non-speculative business.

Q1. For FY22-23, I decide not to file ITR as my overall income is less than 2.5L. Is this fine ?
Q2. If I do not file ITR for FY22-23, will I still be carry forward my 1L loss of FY21-22 to future years like FY23-24 and so on ?

Hi @sudha_sakthivel

It is advisable to file your ITR in FY 2022-23 as the loss of 1L will be set off and the remaining 50,000 will be the taxable amount.
However, since your income is less than 2.5 lakhs, you will be entitled to claim a rebate u/s 87A and hence no tax will be payable.

In case, you don’t file for FY 2022-23, you will be able to carry forward the loss to future years if the loss had been reported earlier.

I have a loss of 17k in f&o and have noticed that this is not set off in current income if i don’t confirm CYLA. Should i set off loss or carry forward?

setting off loss doesn’t really help in this year since ltcg < 1lakh.

Hi @Sandesh_K

On Quicko, the losses are first set off and then if any remains, it is carried forward.

If I file for FY22-23, I will lose my 1L loss of FY21-22 unnecessary by setting off this time.
But If I do not file FY22-23, I can use make use of my 1L loss of FY21-22 in future years efficiently…

Is this fine ? Or Should I mandatorily file FY22-23 ?
What is best option ?

Hi Quicko,
Pls reply your suggestion for this above question…

Hi @sudha_sakthivel

It is always recommended to file an ITR.
In case you don’t file now, you still will be setting it off against your future profits.

Hope this clarifies.

Can you tell me if FnO Losses be set off against Sell of House Property?

And is there any limitation that setoff can be done in the same year or the setoff can happen in subsequent years till 8 years?

Say I have X loss in fno, and I have X tax as Property sell

  • Can the set off make it to 0 in the same year?
  • Can the set off make it to 0 in the subsequent years till 8 years?

Hi @subrat_biswal

The F&O loss is a non-speculative business loss.
Business loss other than speculative business can be set off against any head of income except salary income in the same year.
If still any loss remains, it can be carried forward up to the next 8 assessment years from the assessment year in which the loss was incurred, provided the ITR was filed within the due date.
In future years, the loss can be adjusted only against Income from business or profession.

Hope this clarifies.

Hi @Shrutika_Shah , could you please help me with below queries?

  1. If I opt for New Tax Regime, can I carry forward FO losses (Business loss) which were brought forward
    from last year?

  2. In the current year, can we off-set dividend income with LTCL from this year?

  3. In the current year, can we off-set dividend income with FO loss (Business loss) from current year?

  4. In the current year, can we off-set dividend income with Business loss (FO loss) which was brought forward from last year?


Hi @jyotibanga

Here are answers to your queries.

  1. If you had filed an original return, you can carry forward the losses under both the regimes.
  2. LTCL can only be set off against LTCG in the current years and the future years.
  3. In the current year, you can set off IFOS against Business loss.
  4. Brought forward business loss can be set off only against business income.

Hope this helps.

If yes:

  • what is the limit of adjustment?

Hi @Sakthi_L

In the current year, you can:

  1. Set off STCL against both STCG & LTC
  2. LTCL against only LTCG

In case you’re not able to set off the loss fully, you can carry forward the capital loss for 8 years, provided you have filed your original return on time and reported this loss.
The set loss rules remain the same as above.

You can adjust the capital loss from shares against capital gains from a property, provided the conditions said above.

Hope this clarifies.

I have a general query wrt filing of Income tax return in case of losses.
Suppose the person has loss from business in FY:2019-20 and thus to carry forward the same, ITR was duly filed within the time specified. Now the person has not filed ITR in next 2 years i.e., 2020-21 & 2021-22. Again the person is filing ITR now in 2022-23. Now the question is whether CPC will allow the set-off of losses shown as b/f in 2019-20 even though person has not filed the ITR in subsequent years even though as per law the same can be carried forward for 8 years.
Please suggest whether it is mandatory to file the ITR in case assessee wants to carry forward the losses or the same shall be allowed even without filing the ITR

Hey @garg.pulkit131,

If the ITR was filed before the due date for the assessment year in which losses were carried forward, you will be allowed to set them off. However, it’ll be mandatory to file the ITR in the assessment year in which you want to set off such losses.

If I have STCL for FY 2021-22 and I want to set off against LTCG of FY 2022-23, can I do that?

Hi @Taurian_04

You can set off the LTCL against both STCG & LTCG and carry forward the loss for the next 8 years if you had filed the original return of FY 2021-22 and reported those losses.

1 Like