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It is allowed in all cases except the following −
Exceptions
(a) Loss from speculation business can be adjusted only against income from speculation business [Section 73]
[i.e. Loss from speculation business cannot be adjusted against profit of normal business, however opposite is possible].
(b)Loss from specified business under Section 35AD can be adjusted against only against any other specified business under Section 35AD
[i.e. it cannot be adjusted against normal business]
(c) Loss from activity of owning maintaining race horses can be set off against income from owning and maintaining race horses.
(d) Loss from lottery / cross word puzzle games cannot be adjusted against income from lottery etc.
(e) Loss from exempt source cannot be adjusted against income from a taxable source i.e. if income is exempt its loss can’t be setoff
(f) LTCL can be set off against only LTCG
[However STCL can be set off against both LTCG & STCG]
