Carry-Forward Losses

After making the appropriate and permissible inter-source and inter-head adjustments, there could still be unadjusted losses. These unadjusted losses can be carried forward to future years for adjustments against income of these years. The rules as regards carry forward differ slightly for different heads of income.

Losses from House Property:

  • Can be carried forward up to next 8 AY’s immediately succeeding the A.Y in which the loss was incurred and it can be adjusted only against Income from house property.
  • Can be carried forward even if the return of income for the loss year is belatedly filed.

Losses from Non-speculative Business loss:

  • Can be carried forward up to next 8 AY’s immediately succeeding the A.Y in which the loss was incurred and it can be adjusted only against Income from business or profession.
  • Cannot be carried forward if the return is not filed within the original due date.

Speculative Business Loss:

  • Can be carried forward up to next 4 AY’s immediately succeeding the A.Y in which the loss was incurred and it can be adjusted only against Income from speculative business.
  • Cannot be carried forward if the return is not filed within the original due date.

Specified Business Loss under 35AD:

  • No time limit to carry forward the losses from the specified business under 35AD and it be adjusted only against Income from specified business under 35AD
  • Cannot be carried forward if the return is not filed within the original due date.

Capital Losses:

  • Can be carried forward up to next 8 AY’s immediately succeeding the A.Y in which the loss was incurred
  • Long-term capital losses can be adjusted only against long-term capital gains.
  • Short-term capital losses can be set off against long-term capital gains as well as short-term capital gains.
  • Cannot be carried forward if the return is not filed within the original due date.

Losses from owning and maintaining race-horses:

  • Can be carried forward up to next 4 AY’s immediately succeeding the A.Y in which the loss was incurred. And it can be adjusted only against income from owning and maintaining race-horses only.
  • Cannot be carried forward if the return is not filed within the original due date.

2 thoughts on “Carry-Forward Losses

  • How to account the lose of flood or national calamity issues,

    • Neha@emudhra says:

      Thanks for writing to us. Please provide us with further information like what is the loss incurred and what you want to declare in the returns or have you given some donations during the previous year and want to report it ?

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