Learn how to effectively add and carry forward previous years' losses in your Income Tax Return for FY 2025-26. Understand the rules, procedures, and maximize your tax benefits.
Summary of Set-off and Carry Forward of Losses
Procedure to Add Previous Years’ Losses
FAQs on Adding Previous Years’ Losses
Understand the types of losses and how they can be adjusted against income.
Loss from House Property
Losses from house property can be adjusted against other income.
Intra-head adjustment allowed up to ₹2,00,000
Can be carried forward for 8 years
No need to file ITR before due date for carry forward
Speculative Business Loss
Speculative business losses have specific carry forward rules.
Only set-off against speculative business income
Carried forward for 4 years
Mandatory to file ITR before due date
Other Business Losses
General business losses can be adjusted against various incomes.
Allowed against any business income except salary
Carried forward for 8 years
ITR must be filed before due date
Capital Losses
Understand the treatment of capital losses.
Short-term losses set-off against STCG & LTCG
Long-term losses only against LTCG
Both carried forward for 8 years
Step-by-step guide to adding previous years' losses to your ITR.
Accessing the ITR Portal
Start by logging into the income tax e-filing portal.
Visit the official income tax e-filing website
Log in using your PAN and password
Navigate to the 'Income Details' section
Entering Loss Details
Input the details of your previous years' losses.
Select 'Carry Forward of Losses' under tax details
Choose the assessment year of the incurred loss
Enter the loss amount with a '-' sign
Adding Unabsorbed Depreciation
Include any unabsorbed depreciation from previous years.
Click on 'Add Previous Year Depreciation Loss'
Enter the relevant details and amounts
Ensure all data is accurate before saving
Finalizing and Saving
Complete the process by saving your entries.
Review all entered data for accuracy
Click 'Save' to store your entries
Proceed to e-filing by clicking 'Go to Next'
What is the deadline for filing ITR to carry forward losses?
To carry forward losses, you must file your ITR by the due date, typically July 31st for individuals. Missing this deadline means you cannot carry forward most losses.
Can losses from house property be set off against salary income?
Yes, losses from house property can be set off against salary income, but only up to ₹2,00,000 in a financial year.
How long can speculative business losses be carried forward?
Speculative business losses can be carried forward for up to 4 years, provided the ITR is filed before the due date.
Are there any losses that cannot be carried forward?
Yes, losses under the 'Other Sources' category cannot be carried forward. They must be set off in the same year.
What happens if I miss the deadline to file ITR?
If you miss the deadline, you cannot carry forward most losses, except for house property losses, which can still be carried forward.
Can I carry forward losses under the new tax regime?
Under the new tax regime, certain deductions and exemptions are not available, but losses can still be carried forward as per existing rules.
How are capital losses treated differently?
Short-term capital losses can be set off against both STCG and LTCG, while long-term capital losses can only be set off against LTCG.
Is it mandatory to file ITR to carry forward losses?
Yes, filing ITR before the due date is mandatory to carry forward most types of losses, except house property losses.