Understanding Inter-Head Adjustments: Key Restrictions on Offsetting Losses Across Different Income Heads in Tax Law

Inter-head adjustment in income tax refers to offsetting a loss under one income head against income from another head, following intra-head adjustments. Restrictions include: speculative business losses cannot offset other income, capital gains losses cannot offset other income heads, and no losses can offset income from gambling or betting. Losses from maintaining race horses or specified businesses under section 35AD cannot be set off against other income. Business and profession losses cannot offset salary income. These rules guide taxpayers in managing losses across different income categories.

---

---

---