Set-off of Losses refers to the process under Indian income tax laws where a taxpayer can adjust losses incurred in one source or head of income against profits or gains from another source or head in the same assessment year. This helps reduce the overall taxable income, thereby lowering the tax liability for individuals, businesses, and companies. For instance, losses from business or capital gains can be set off against income from other businesses or sources, subject to certain rules and restrictions prescribed by the Income Tax Act. Understanding and applying set-off of losses correctly is important for compliance and efficient tax planning. It is commonly used during income tax filings to optimize tax payments by legally reducing taxable income through legitimate loss adjustments. For more detailed guidance and professional assistance on managing income tax, including set-off of losses, you may visit FinTax24’s income tax solutions.
Set-off of Losses