Under the Income Tax Act, 1961, different types of losses can be carried forward for set periods and adjusted against specific incomes. Here’s a summary:

1. Business Losses

• Carried forward for: 8 assessment years
• Set-off allowed against: Only business income (not salary, capital gains, or house property income).
• Condition: The income tax return must be filed on or before the due date under Section 139(1).

2. Speculation Losses (from intra-day trading or derivatives)

• Carried forward for: 4 assessment years
• Set-off allowed against: Only speculation profits (not any other income).

3. Capital Losses (from the sale of assets, shares, or securities)

• Carried forward for: 8 assessment years
• Set-off allowed against:
  • Short-Term Capital Loss (STCL): Can be adjusted against both short-term and long-term capital gains.
  • Long-Term Capital Loss (LTCL): Can be adjusted only against long-term capital gains.

4. Losses from House Property

• Carried forward for: 8 assessment years
• Set-off allowed against: Income from house property.

5. Loss from Owning and Maintaining Race Horses

• Carried forward for: 4 assessment years
• Set-off allowed against: Only income from race horses.

6. Unabsorbed Depreciation

• Carried forward for: Indefinite years
• Set-off allowed against: Any income except salary.

The Income Tax Act allows taxpayers to adjust losses from one source of income against another source of income within the same head. This is called intra-head adjustment and helps in reducing taxable income.

Key Rules for Set-Off of Losses Under the Same Head:

✅ Business Loss: Loss from one business can be set off against income from another business.
✅ House Property Loss: Loss from one property can be set off against income from another property.
✅ Capital Gains:

• Short-term capital loss (STCL) can be set off against short-term or long-term capital gains.
• Long-term capital loss (LTCL) can be set off only against long-term capital gains.

🚫 Exceptions:

• Speculation loss can be set off only against speculation income.
• Loss from owning race horses can be set off only against income from race horses.

es, your son’s earnings from singing on stage are taxable under the Income Tax Act, 1961. The classification of this income depends on the nature and frequency of his performances. Here’s how it is taxed:

1️⃣ Professional Income (Section 28 & 44ADA – Profits & Gains of Business or Profession)

• If your son regularly performs as a singer, his income is classified as “Income from Profession” under the head Profits & Gains of Business or Profession (PGBP).
• He can deduct expenses related to his performances (travel, costumes, equipment, training, etc.).
• If his annual professional income is less than ₹50 lakh, he can opt for the Presumptive Taxation Scheme under Section 44ADA, where 50% of his income is deemed as expenses and only the remaining 50% is taxable.

✅ Example:
If he earns ₹10 lakh in a year from singing, under 44ADA, only ₹5 lakh will be taxable.

2️⃣ Income from Other Sources (Section 56)

• If he sings occasionally (not as a profession), the income is taxed under “Income from Other Sources” (IOS).
• No presumptive taxation applies, but he can claim actual expenses related to the performance.

3️⃣ Clubbing of Income (If Minor) – Section 64(1A)

• If your son is below 18 years of age, his income is usually clubbed with the parent’s income.
• However, since this is his own professional skill-based income, it is NOT clubbed and is taxed in his own hands.

4️⃣ Tax Deducted at Source (TDS) & GST Applicability

• If event organizers or companies pay him, TDS may be deducted at 10% (under Section 194J – Professional Fees).
• If his earnings exceed ₹20 lakh per year (₹10 lakh for NE states), he may also need to register for GST and charge 18% GST on his professional services.

The salary or professional fees earned by your wife may or may not be clubbed with your income, depending on the nature of employment and the relationship between your income and her earnings. Let’s break it down:

1️⃣ When Wife’s Income is NOT Clubbed? ✅

✔ Genuine Salary from an Unrelated Employer:

• If your wife works independently for a company, firm, or any unrelated employer, her salary is taxed in her hands, and clubbing provisions do not apply.
  ✔ Professional Fees from Independent Work:
• If she is self-employed and earning fees from clients, it remains taxable in her hands.
  ✔ When She Has a Separate Business:
• If she is running her own independent business, her income is not clubbed with yours.

2️⃣ When Wife’s Income is Clubbed? ❌

📌 Salary from a Concern in Which You Have Substantial Interest (Section 64(1)(ii))

• If your wife is drawing salary, commission, or fees from a business or company in which you have a substantial interest (i.e., you hold at least 20% equity or voting power), then her salary is clubbed with your income.
• This applies only if her role is not based on her professional qualifications or expertise.

📌 Example:

• If you own a private limited company (where you hold more than 20% shares) and your wife is getting a salary without any actual work, it will be clubbed with your income.
• However, if she is qualified for the role (e.g., a CA earning salary in your accounting firm), her income remains taxable in her own hands.

3️⃣ What About Partnership Firm Income?

• If your wife receives a share of profit from a partnership firm where you are a partner, it is not clubbed as profit-sharing is tax-free under Section 10(2A).
• However, if she receives a salary from the firm and she does not contribute to the business, her salary might be clubbed.

Key Takeaways:

✔ Independent salary/professional fees = Taxed in her hands ✅
✔ Salary from a business where you hold 20%+ = Clubbed with your income ❌
✔ If she is qualified for the job, her income is not clubbed ✅
✔ Salary from an unrelated company = Taxed separately ✅

Difference Between Deep Discount Bonds, Zero Coupon Bonds, and STRIPS

1. Zero-Coupon Bonds:
Zero-coupon bonds are issued at a discount to their face value and do not pay periodic interest. Instead, investors receive the full face value upon maturity. The return on investment is the difference between the purchase price and the redemption value.

2. Deep Discount Bonds:
Deep discount bonds are a type of zero-coupon bond issued at a significant discount. They typically have a long tenure and offer high capital appreciation. The key difference is that these are usually issued with an exceptionally high discount compared to other zero-coupon bonds.

3. STRIPS (Separate Trading of Registered Interest and Principal Securities):
STRIPS are created by separating the principal and interest components of a regular coupon-bearing bond. Each portion is sold individually as a zero-coupon security. These are often issued by government entities, allowing investors to buy either the principal or interest portion separately.

Key Differences:

• Interest Payments: None of these instruments pay periodic interest. Returns are realized on maturity.
• Discount Rate: Deep discount bonds are sold at a much higher discount compared to standard zero-coupon bonds.
• Creation: Zero-coupon and deep discount bonds are issued directly, whereas STRIPS are created by breaking down existing coupon bonds.

These instruments are beneficial for long-term investors seeking assured returns with no reinvestment risk.