Carry Forward of Losses
If a loss cannot be set off either under the same head or under the different heads because of absence or inadequacy of income of the same year, it may be carried forward and set off against the income of the subsequent year. Under the Act the following losses can be carried forward:
- Loss under the head “Income from House Property”
- Loss under the head “Profits and Gains of Business or Profession”
- Loss under the head “Capital Gains”
- Loss under the head “Income from Other Sources” only from the activity of owning and maintaining race horses.
Rule for carry forward of loss in brief:
- House Property loss can be carried forward for- 8 years
- Speculation loss can be carried forward for – 4 years
- Non-speculation business loss
- On account of unabsorbed depreciation, capital expenditure on scientific research and family planning – No time-limit
- Loss from a specified business under section 35AD- No time-limit
- Other remaining business loss- 8 years
- Capital loss
- Short term capital loss- 8 years
- Long term capital loss- 8 years
5. Loss from the activity of owning and maintaining race horses- 4 years
