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CS Executive · Tax Laws and Practice · Clubbing Provisions and Set Off and Carry Forward of Losses

Meera Textiles Ltd has a speculation business loss first computed in tax year 1. Under section 113 of the Income-tax Act, 2025, the loss can be carried forward for at most how many tax years immediately succeeding the tax year of the loss?

A speculation business loss can be carried forward for a maximum of four tax years immediately succeeding the tax year in which it was first computed. After that period the unabsorbed loss cannot be carried forward further under section 113.

  1. AFourCorrect
  2. BEight
  3. CTwo
  4. DIndefinitely

Explanation

Section 113(3) states that no speculation loss is carried forward for more than four tax years immediately succeeding the tax year for which it was first computed. Eight years is the period for ordinary business losses elsewhere, not this section.

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