Before implementing intra-head modifications that result in loss, the following limitations should be kept in mind:
• Any income changes resulting from speculative operations cannot be offset by losses from such activities. Losses from non-speculative companies, however, may be offset by profits from such businesses.
• Only income derived from long-term capital gains may be offset by long-term capital losses. Short-term capital loss can, however, be offset by either long-term or short-term capital gain.
Income from prizes from lotteries, crossword puzzles, races (including horse races), card games, and other games of any kind, as well as gambling and wagers of any kind, cannot be deducted from taxes.
• Income from any source other than the business of owning and caring for racing horses cannot be offset against the income from the business of owning and breeding race horses.
Other than income from specified enterprises, losses from businesses listed in section 35AD cannot be offset ( section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating a warehousing facility for storage of agricultural produce, developing and building a housing project, etc.).