If after intra head or inter head setoff,still some loss remains.It can be carry forward to next period to be adjusted with next years income

This is called carry forward and setoff

Example 1

If a person has 2 business,In first business there is profit of 200000 and in second ,there is loss of 270000,


Loss upto 200000 can be setoff against profit.

Remaining loss of 70000 can be carry forward to next period


Example 2 

Suppose in Example 1 there is profit of 300000 and 50000 next year

Total profit of next year=800000

Loss of previous period of 70000 can be setoff against it

Profit taxable for next year=800000-70000=Rs 630000



Set off

Carry forward & set off

It means Adjusting loss with profit

It means carrying forward loss to next period


then adjusting it with future period income



Not all loss are allowed to be adjusted with each other.

There are various restrictions on intrahead setoff,interhead setoff as well as carryforward

Lets study these losses one by one

  1. Income Tax
  2. Set off and Carry Forward of Losses
Income Tax
Set off and Carry Forward of Losses

About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.