Loss Set-Off & Carry Forward Calculator

In what order does this tool apply the losses?

This tool uses a fixed sequence. First it nets short-term loss against short-term gain; any excess short-term loss is then set against long-term gain. Next, long-term loss is set against what remains of long-term gain. Then house property loss is applied, then business loss. Speculative loss is not applied to anything and is simply carried forward.

How is house property loss handled?

Up to ₹2,00,000 of the loss a year is set off, first against the salary figure and, if the salary is exhausted, against remaining short-term and then long-term gains. Anything above ₹2,00,000, plus any amount that has no income left to absorb it, is shown as carried forward with the label “carry 8 years”, which is a figure built into this tool.

Why does long-term loss only reduce long-term gain?

Because that is how the tool is coded: the long-term loss is subtracted from net long-term gain and any shortfall becomes a long-term loss carry-forward. It never reduces short-term gain, salary or house property income. A short-term loss, in contrast, can reduce both kinds of capital gain.

What does the business-loss line do?

It sets non-speculative business loss against whatever capital gain is left after the earlier steps and never against salary. The unabsorbed part is carried forward with the tool’s “carry 8 years” label. The tool has no field for other business income, so it cannot offset a loss against a profit from the same business.

What is the speculative-loss line?

The tool copies the amount you enter to a carry-forward line labelled “carry 4 years, only vs speculative gains”. It has no input for speculative gains, so it never sets anything off. The 4-year and 8-year labels are figures built into this tool, and they are shown as text, not checked against any year.

Does the tool compute tax?

No. It produces an “estimated taxable income” figure equal to salary after house property loss plus the remaining gains minus business loss set off, floored at zero. It does not apply slabs, special rates for capital gains, exemptions, deductions, cess or surcharge, and it has no fields for losses brought forward from earlier years.

Which rules are built in, and can they be relied on?

The ₹2,00,000 house property cap and the 8-year and 4-year carry-forward periods are fixed in the code and carry no year label. Indian tax rules change in nearly every Union Budget and this tool is not updated automatically. Whether a loss can actually be carried forward may also depend on how and when a return is filed, which the tool does not check, so the Income Tax Department or a qualified chartered accountant governs.