CMA Intermediate · Direct and Indirect Taxation · Set off and Carry Forward of Losses
Under Section 114 of the Income-tax Act, 2025, a loss computed in respect of a specified business can be set off in the same tax year only against:
A specified business loss may be set off only against profits and gains of another specified business. It cannot be set off against house property income, capital gains or the profits of ordinary businesses, because Section 114(1) confines the set off to specified businesses.
- AProfits and gains of another specified businessCorrect
- BIncome from house property
- CProfits of any other business or profession
- DCapital gains of the same tax year
Explanation
Section 114(1) restricts set off of a loss from a specified business to profits and gains of another specified business. Other heads and ordinary business profits are not available for this set off, so those options are wrong.
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