Business Loss (FnO) Adjustment against Capital Gains and Other Source Income

pratyush33 · March 28, 2025, 6:25am

I have a Businees loss (No-speculative business loss of FnO) of 80k till now and Long Term Capital Gains of 1.25L in Domestic Equity (sold in March 25) and LTCG of 1.5L in Domestic Debt Funds (brought in Nov 2021 and sold in Feb 2025) and Other source Income in Dividends of 15k.
Assume I have salary of 16L (I come in marginally 30% tax slab rate for all other income purposes this FY)

What is the order of set off of the business loss against the other heads ? will the business loss be adjusted first against domestic equity gain of 1.25L ? Can I specify somewhere during filing against which income to set off my loss against ?

Main purpose is to understand if I will be able to claim full 1.25L exemption under Section 112A for FY25 or the business loss will be adjusted entirely against the 1.25L profit I have booked and will only be able to claim 45k as of now for FY25, in that case I will book more equity LTCG profit this year.

Quicko · March 31, 2025, 6:10am

Hi @pratyush33,

The business losses will first be adjusted against slab rate income, which is the dividend income in your case. Then it’ll be adjusted against the LTCG from debt funds followed by LTCG from equity.

Moreover, no, we cannot specify the order in which the losses will be adjusted.

Hope this helps!