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

Ravi Kumar, an individual, incurred a speculation loss of Rs 60,000 in the tax year 2026-27 that could not be set off in that year. Under section 113 of the Income-tax Act, 2025, up to which tax year can this loss be carried forward?

The loss can be carried forward up to the tax year 2030-31. Section 113 permits carry forward for no more than four tax years immediately following the year of loss, so 2027-28 to 2030-31 are available. The eight-year limit applies only to non-speculative business losses.

  1. A2027-28
  2. B2029-30
  3. C2030-31Correct
  4. D2034-35

Explanation

Section 113(3) bars carry forward for more than four tax years immediately succeeding the year the loss was first computed. The four succeeding years are 2027-28, 2028-29, 2029-30 and 2030-31. The eight-year period of section 112 applies to ordinary business loss, not speculation loss, so 2034-35 is wrong.

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