Income Tax Act, 2025  ·  Chapter VII — Set Off and Carry Forward of Losses  ·  Section 109

Section 109
Set off of losses under any other head of income

IT Act 2025 Chapter VII Effective 1 April 2026 Old: 71
New Provision
Section 109, IT Act 2025
Replaces (IT Act 1961)
71
Chapter
Chapter VII — Set Off and Carry Forward of Losses
Effective From
1 April 2026
Statutory Text — Section 109

(1) Subject to the provisions of this Chapter, for any tax year, if income computed under any head of income (other than “Capital gains”) is a loss, such loss shall be set off against income of the assessee under any other head, including “Capital gains”, if any, assessable for that tax year, subject to the following conditions:–– (a) loss under the head “Profits and gains of business or profession” shall not be set off against income assessable under the head “Salaries”; and (b) loss under the head “Income from house property” shall be set off to the extent of ₹ 200000 against income under any other head; (2) For any tax year, the loss under the head “Capital gains” shall not be set off against income under any other head.

Shahi & Co. — Our Understanding
This section is part of Chapter VII of the Income Tax Act, 2025, effective from 1 April 2026. It carries forward the corresponding provision from the Income Tax Act, 1961 with simplified language and restructured drafting.
Practical Note: For specific guidance on how this provision applies to your situation, consult a qualified Chartered Accountant. The Income Tax Act, 2025 retains the substance of the old law while making it more accessible.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 109 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to egazette.gov.in or incometaxindia.gov.in. This does not constitute legal or tax advice.