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CA Intermediate · Taxation · Set-Off or Carry Forward and Set-off of Losses

Meera Textiles, a proprietorship, has the following results for tax year 2026-27 (all heads computed): Income from house property: loss of Rs 1,40,000; Salary income: Rs 3,00,000 (Meera also draws salary from a firm where she is not a partner); Business income (non-speculative): Rs 90,000. Ignoring deductions, what is her gross total income after intra-year set-off, assuming the house property loss is set off to the maximum extent permitted in the same year?

Gross total income is Rs 2,50,000. The house property loss of Rs 1,40,000 is within the Rs 2,00,000 annual cap for set-off against other heads, so it is fully set off against salary and business income totalling Rs 3,90,000, leaving Rs 2,50,000.

  1. ARs 2,50,000Correct
  2. BRs 1,90,000
  3. CRs 3,90,000
  4. DRs 2,00,000

Explanation

House property loss can be set off against any other head in the same year; the Rs 2,00,000 limit applies only to set-off against other heads: loss Rs 1,40,000 is below Rs 2,00,000, so the full loss is allowed. Total of other heads = 3,00,000 + 90,000 = 3,90,000. Less 1,40,000 = 2,50,000. Rs 3,90,000 ignores the set-off; Rs 1,90,000 wrongly deducts loss from salary and then ignores the business income.

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