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Partial Set-Off of a Loss in Income Tax Return

Say ,following is the Income Details of an Assessee :

Income From Other Sources – Rs. 7,00,000
Business Loss – Rs. 3,00,000

Now , he wants to set off only Rs. 2,00,000 Business Loss from “Income From Other Sources” and carry forward Rs. 1,00,000 Business Loss to Future years . Can he do this ?

In short ,
(i) is it the choice of the Assessee how much of a Loss he wants to set off against Income for a particular year ?
(ii) or does he compulsorily have to set-off as much of the Loss as is possible in the year inwhich the Loss occurred ?
(iii) is the rule something different altogether from the above two points ?

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