Carry forward and set off of business loss

The unabsorbed business loss (other than loss from speculation business) for any tax year shall be carried forward to the subsequent tax year and 35 shall be set off only against the profits and gains of business or profession, carried on by him and assessable for that tax year, if any, computed for such subsequent tax year, and so on.

The unabsorbed business loss referred to in sub-section (1), shall be carried forward to the following tax year, not being more than eight tax years 40 immediately succeeding the tax year in which such loss was first computed.

The unabsorbed business loss referred to in sub-section (1) shall first be allowed to be set off before allowing set off of any carried forward allowance under section 33(11) or 45(7).

In this section, “unabsorbed business loss” means, loss computed under 45 the head “Profits and gains of business or profession” (other than loss from speculation business) for the tax year, which has not been, or is not wholly, set off against income from any other head, under section 109 for the said tax year.