Income Tax Act 2023
Section 70 - Set off and Carry Forward of Losses
(as updated till Finance Act 2024)
(1) Subject to the provisions of sub-section (2), the loss determined in respect of any head of any assessment year may be set off against the income of other heads of income in that assessment year.
(2) Any loss as mentioned in the table below shall not be set off against income under any head or source other than income under that head or source, namely:—
Table
| Serial No. | Source or Head of income | To be set off |
| (1) | (2) | (3) |
| 1. | Capital loss | Set off may only be made with capital gain. |
| 2. | Business Loss | Set off may only be made with income from business. |
| 3. | Loss from speculative business | Set off may only be made with income from speculative business |
| 4. | Loss from tobacco products | Set off may be made only with income from manufacturing of tobacco products. |
(3) Loss from any source, income of which is exempted from tax or taxed at a reduced rate or subject to minimum tax 1[under sub-section (2) of section 163] may not be set off or carried forward.
(4) Loss of a firm or association of persons shall be set off only against the assessed income of the firm or association of persons and not against the income of any partner of the firm or member of the association of persons.
(5) If the loss of any head of income in an assessment year cannot be fully set off with the income of any other source or head of income of that assessment year, such unadjusted loss may be carried forward to successive 6 (six) assessment years for setting off.
(6) Subject to the Eight Schedule, where any person carrying on any business or profession has been succeeded otherwise than by inheritance, the successor shall not be entitled to set off or carry forward the loss of the predecessor against any of his own income.
1 The words, figures and brackets “under sub-section (2) of section 163” were inserted by section 30 of the Finance Act, 2024 (Act No. V of 2024) with effect from 1st July 2024.
Disclaimer: This is the authentic English text of the Income Tax Act 2023, as published under SRO No. 404-Law/2025 dated 08 October 2025. In the event of any inconsistency or conflict between the content on this website and the official Government publications or gazette notifications relating to laws, rules, regulations or SROs, the official Government publications and notifications shall prevail.