Quick Summary
Taxpayers and businesses may not always have taxable profits in every financial year. In such situations, the Income-tax Act, 2025 provides rules that determine how eligible losses can be adjusted against income and, where the loss remains unadjusted, carried forward to future years. The Income Tax Department's latest explanatory material on set-off and carry forward of losses covers important rules relating to intra-head adjustment, inter-head adjustment, business losses, speculative losses, h
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FAQ :
Intra-head adjustment allows a loss from one source under a specific head of income to be offset against income from another source within the same head, provided certain restrictions are met.
No, business or professional losses generally cannot be set off against salary income.
Unadjusted non-speculative business or professional losses can generally be carried forward for eight years immediately succeeding the year in which they were incurred.
Unadjusted house property losses can be carried forward for eight years and set off against future income from house property. However, taxpayers opting for the new tax regime under section 202 cannot carry forward these losses.
No, capital losses cannot be adjusted against income under other heads of income; they can only be set off against capital gains.
Yes, brought-forward or current losses and unabsorbed depreciation cannot be set off against undisclosed income detected during search, requisition, or survey proceedings.
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