§ 114
Chapter VII — Set Off, Or Carry Forward And Set Off Of Losses
Set off and carry forward of losses computed in respect of specified business
Income-tax Act, 2025
Business owners can set off losses from one specified business against profits from another specified business. If the loss cannot be fully set off, it can be carried forward to the next tax year. The carried forward loss can then be set off against profits from any specified business in that year. Key points to note include:
- losses can only be set off against specified business profits
- unset off losses can be carried forward to subsequent years
📜 Official text of the section +
114. (1) Any loss, computed in respect of a specified business, referred to in section
46, shall be set off only against profits and gains of another specified business.
(2) Where for any tax year, loss computed in respect of a specified business cannot
be wholly set off under sub-section (1), so much of the loss not so set off or the whole
loss, as the case may be, shall be carried forward to the following tax year and—
( i) be set off against the profits and gains, if any, of any specified business
carried on by him for such tax year; and
( ii) if the loss cannot be wholly so set off, the amount of loss not so set off
shall be carried forward to the following tax year and so on.
Set off and carry forward of losses from specified activity.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.
Related sections
§ 108SET OFF, OR CARRY FORWARD AND SET OFF OF LOSSES Set off of losses under same head of income§ 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