ITR filing 2026: Know about intra and inter-head adjustments to maximise tax savings

The Income-tax rules allow investors to set off some of their losses against specified gains. This provision enables taxpayers to plan their tax-saving strategy in advance.

As the ITR filing season for AY 2026-27 is about to gain momentum, this article explains intra- and inter-head adjustments to help you maximise tax savings.

The tax rules allow intra-and inter-head adjustments. First, you need to do the intra-head adjustment and then look for inter-head set-off options. Let's understand both:

Intra-head adjustment

When you incur loss from any source under a particular head of income, then you are allowed to adjust such loss against income from any other source falling under the same head.

For example, loss from a business can be adjusted against profit from another business. Similarly, capital losses can be set-off against capital gains.

However, there are certain restrictions when it comes to intra-head adjustment of loss.

• You cannot set-off loss from a speculative business against any income other than income from speculative business.

• You can set-off non-speculative business loss against income from a speculative business.

• You cannot set-off long-term capital loss against any income other than income from long-term capital gain.

• You can set-off short-term capital loss against long-term or short-term capital gain.

• In case you have any loss, you cannot set it off against income from winnings from lotteries, crossword puzzles, race including horse race, card game, and any other game of any sort or from gambling or betting of any form or nature.

• You cannot set off loss from the business of owning and maintaining race horses against any income other than income from the business of owning and maintaining race horses.

Inter-head adjustments

Inter-head adjustment can be done after making the intra-head adjustments.

Under this provision, any loss under a head of income can be adjusted against income under other heads.

However, there are certain restrictions that taxpayers should know.

• You cannot set-off loss from a speculative business against any other income.

• You can set-off non-speculative business loss ​against income from speculative business.

• You cannot set-off loss under head "Capital gains" against income under other heads of income.

• You cannot set-off any loss against income from winnings from lotteries, crossword puzzles, race including horse race, card game, and any other game of any sort or from gambling or betting of any form or nature.

• You cannot adjust loss from the business of owning and maintaining race horses against any other income.

• You cannot set-off loss from business and profession against income chargeable to tax under the head "Salaries".​

The due date to file ITR for AY 2026-27 is July 31, 2026.