Income Tax Act, 2025  ·  Chapter VII — Set Off and Carry Forward of Losses  ·  Section 114

Section 114
Set off and carry forward of losses computed in

IT Act 2025 Chapter VII Effective 1 April 2026 Old: 73A
New Provision
Section 114, IT Act 2025
Replaces (IT Act 1961)
73A
Chapter
Chapter VII — Set Off and Carry Forward of Losses
Effective From
1 April 2026
Statutory Text — Section 114

ny 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.

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 114 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.