₹8 Lakh Income − ₹3 Lakh Loss = ₹5 Lakh Taxable Income? | Set-Off of Losses | Day 22

💰 *You earned ₹8 lakh from one source but suffered a ₹3 lakh loss from another.* Does that automatically mean your taxable income becomes *₹5 lakh?* *Not necessarily.* Welcome to *Day 22 of Understanding Income-tax Act, 2025 — 100 Days.* Today we're understanding an important concept in computing income: SET-OFF OF LOSSES The Income-tax Act contains specific rules determining whether a loss from one source or Head of Income can be adjusted against income from another. The basic framework is: *COMPUTE INCOME/LOSS FROM EACH SOURCE* ↓ *INTRA-HEAD SET-OFF* ↓ *COMPUTE EACH HEAD OF INCOME* ↓ *INTER-HEAD SET-OFF* ↓ *APPLY RESTRICTIONS* ↓ *DETERMINE UNABSORBED LOSS, IF ANY* In this episode, we understand: • What Set-Off of Losses means • Intra-head set-off • Inter-head set-off • House Property losses • Business/Profession losses • Capital losses • Important restrictions and exceptions • Why every loss cannot simply be deducted from every type of income INTRA-HEAD vs INTER-HEAD *Intra-head set-off* generally deals with adjusting an eligible loss from one source against income from another source falling under the **same Head of Income**, subject to the applicable provisions. *Inter-head set-off* involves adjustment of an eligible loss under one Head against income under **another Head**, again subject to statutory restrictions. That's why: ❌ *₹8 LAKH INCOME − ₹3 LAKH LOSS ≠ AUTOMATICALLY ₹5 LAKH TAXABLE INCOME* You first need to determine: *What type of loss is it?* *Under which Head does it arise?* *What income are you trying to adjust it against?* *Does the Act permit that set-off?* *Is there a specific restriction or exception?* 📚 *HOW DAY 22 FITS INTO OUR SERIES* Days 15–20 → Five Heads of Income Day 21 → Clubbing of Income *Day 22 → Set-Off of Losses* Day 23 → Carry Forward of Losses And that brings us to the next question: 👉 *What happens when an eligible loss cannot be fully set off in the current year?* That's our next lesson — *Day 23: Carry Forward of Losses.* 🔔 Subscribe to *The CA Vault Official* and follow the complete 100-Day journey through the Income-tax Act, 2025. *100 DAYS. ONE ACT. SIMPLE LANGUAGE.* ⚠️ *Disclaimer:* This video is for educational and informational purposes only and should not be treated as professional tax, legal or investment advice. Set-off treatment depends on the nature and source of income/loss, applicable restrictions and the specific facts of each case. #IncomeTaxAct2025 #SetOffOfLosses #IncomeTaxIndia #TaxEducation #TheCAVaultOfficial