§ 108
Chapter VII — Set Off, Or Carry Forward And Set Off Of Losses
SET OFF, OR CARRY FORWARD AND SET OFF OF LOSSES Set off of losses under same head of income
Income-tax Act, 2025
Business owners can set off losses from one source against income from another source under the same head of income for the same tax year. This applies to most heads of income, except capital gains.
- Short-term capital losses can be set off against short-term capital gains.
- Long-term capital losses can be set off against long-term capital gains.
📜 Official text of the section +
108. (1) Unless provided otherwise in this Act, for any tax year, if net result of
computation from any source under any head of income (other than
“Capital gains”) is a loss, then assessee shall be entitled to set off such loss against
his income from any other source under the same head for that tax year.
(2) Where the net result of computation of income made for any tax year under
sections 72 to 90 in respect of—
( a) any short-term capital asset is a loss, such loss shall be set off against
the income, computed in respect of any other capital asset for that year;
( b) any long-term capital asset is a loss, such loss shall be set off against the
income computed in respect of any other long-term capital asset for that
year.
Set off of losses under any other head of income.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.
Related sections
§ 109Set off of losses under any other head of income§ 110Carry forward and set off of loss from house property§ 111Carry forward and set off of loss from Capital gains§ 112Carry forward and set off of business loss§ 113Section 113§ 114Set off and carry forward of losses computed in respect of specified business