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CA Intermediate · Taxation · Set-Off or Carry Forward and Set-off of Losses

Which of the following statements about carry forward of losses under the Income-tax Act, 2025 is correct?

A speculative business loss can be carried forward for a maximum of four tax years immediately following the loss year, and can be set off only against speculative business income. The other statements misstate the carry-forward periods or the return-filing condition.

  1. AA loss from a specified business can be carried forward even if the return is not filed by the due date
  2. BA speculative business loss can be carried forward for a maximum of four tax years immediately succeeding the loss yearCorrect
  3. CA house property loss can be carried forward for any number of years
  4. DA non-speculative business loss can be carried forward for four years

Explanation

Speculative business loss can be carried forward for four tax years, and only set off against speculative business income. House property loss is carried forward for eight years, not indefinitely. Non-speculative business loss is carried forward for eight years. Carry-forward of business losses generally requires a return filed by the due date.

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