Income Tax Act, 2025  ·  Chapter VII — Set Off and Carry Forward of Losses  ·  Section 112

Section 112
Carry forward and set off of business loss

IT Act 2025 Chapter VII Effective 1 April 2026 Old: 72
New Provision
Section 112, IT Act 2025
Replaces (IT Act 1961)
72
Chapter
Chapter VII — Set Off and Carry Forward of Losses
Effective From
1 April 2026
Statutory Text — Section 112

(1) Where for any tax year, loss computed under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) cannot be wholly set off against the income under any other head as per section 109, 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 business or profession carried on by him for that 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. (2) No loss shall be carried forward under this section for more than eight tax years immediately succeeding the tax year for which the loss was first computed. (3) Where any allowance of part thereof under section 33(11) or 45(7) is to be carried forward, effect shall first be given to the provision of this section.

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 112 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.