Carry forward losses from old regime to new regime

Carry Forward and Set Off of Losses When switching from the old tax regime to the new tax regime, understanding how losses are carried forward and set off is crucial. Losses Incurred Under Old Regime - *Losses in LTCG from Sale of Housing Properties*: These losses can be carried forward for up to 8 years and set off against future long-term capital gains, including those from mutual funds. - *Loss from Housing Property*: Losses from let-out properties due to home loans can be carried forward for up to 8 years. However, under the new tax regime, these losses can only be set off against income from house property, not against other heads of income.¹ ² Switching to New Tax Regime - *Carry Forward of Losses*: There are no restrictions on carrying forward losses from the old regime to the new regime for capital losses. However, for house property losses, while they can be carried forward, their set-off is restricted to income from house property under the new tax regime. - *Set Off Against LTCG of Mutual Funds*: Long-term capital losses from the sale of housing properties can be set off against LTCG from mutual funds. However, losses from house property cannot be set off against LTCG from mutual funds under the new tax regime.³ Key Considerations - Ensure timely filing of income tax returns to carry forward losses. - Understand the distinction between capital losses and house property losses when setting off against different types of income. - Consult a tax professional for personalized advice on managing losses under both tax regimes.

inter-head adjustment of brought forward losses is anyway not allowed - irrespective of old or new scheme. So your brought forward house property losses are anyway not available for set off against capital gains.

How about Business Loss (in following scenarios) , can it be brought forward on switching from Old to New Regime?

• Business Loss (Non Speculative) from F&O
• Business Loss (Non Speculative) other than F&O
• Unabsorbed Depreciation

A. Only long-term capital loss can be carried forward. Loss under house property can be set off in the current year only. Remaining loss under house property will not be carried forward.

B. Only long-term capital loss can be set off from LTCG in mutual funds.

Switching to the new tax regime does not automatically wipe out your carried-forward losses, but the set-off rules are different.

For carry-forward capital losses (STCL/LTCL): These carry forward under the new regime for the remaining 8-year period. No change. You can set off STCL against future STCG and LTCG, and LTCL against future LTCG, regardless of regime.

For carry-forward business losses (non-speculation): These can be set off against future business income under the new regime subject to the normal 8-year limit.

For house property loss: Under the new tax regime, you cannot claim a deduction for interest on home loan under Section 24(b) except for let-out property. Crucially, you also cannot set off a loss from house property (negative income under Section 24) against other income in the new regime. If you have carry-forward HP loss, it remains in your hands but you cannot utilise it in years you are under the new regime.

Key rule: The carry-forward itself is not forfeited. But your ability to SET OFF in a given year depends on which regime you file in that year.

This [old vs new tax regime comparison guide](https://taxgarden.in/blog/old-vs-new-tax-regime-ay-2026-27-which-is-better) explains the loss set-off rules and deduction differences for AY 2026-27.