## Carry Forward Period — Comprehensive Summary

### Master Table

Nature of Loss	Income Against Which Set Off Allowed	Max Carry Forward Period
Unabsorbed Depreciation	Any head except Salaries	Indefinite
Specified Business Loss (Sec 35AD)	Profit of ANY Specified Business (irrespective of whether deduction u/s 35AD was claimed)	Indefinite
House Property Loss	Any income under the head HP	8 Years
Normal Business Loss	Any income under PGBP (incl. Specified/Speculative)	8 Years
Long Term Capital Loss (LTCL)	LTCG only	8 Years
Short Term Capital Loss (STCL)	STCG / LTCG	8 Years
Speculative Business Loss	Speculative Business Income	4 Years
Loss from Owning & Maintaining Race Horses	Income from Owning & Maintaining Race Horses	4 Years

### Key Distinctions to Remember

#### Unabsorbed Depreciation — Unique Treatment

→ Can be carried forward indefinitely.

→ Can be set off against any head EXCEPT Salaries.

→ Not subject to the requirement of filing return on time.

#### Specified Business Loss — Most Generous Among Business Losses

→ Indefinite carry forward.

→ Can be set off against any specified business income (regardless of whether the source business claimed 35AD deduction).

#### 4-Year Losses (Shortest Tenure)

→ Speculative Business Loss

→ Race Horse Loss

→ These are 'restricted' losses with narrow eligibility AND shortest carry forward.

### Important Rules About Other Income

#### No Set Off Against Undisclosed Income

→ No set off of losses or unabsorbed depreciation is allowed against undisclosed income.

#### No Set Off Against Casual Income

→ Casual income (lottery, crossword puzzles, horse races, card games) is taxed at flat 30%.

→ NO set off of any loss is allowed against such casual income.

Worked example

### Example 1

Example 1 — Periods Comparison:

A business loss incurred in PY 2024-25 can be c/f up to PY 2032-33 (8 years).
A speculative loss of PY 2024-25 can be c/f only up to PY 2028-29 (4 years).
Unabsorbed depreciation of PY 2024-25 can be c/f indefinitely.

Example 2 — Counting the 8 Years:

Mr. A has business loss in PY 2025-26.

→ Can be c/f from PY 2026-27 to PY 2033-34 (8 years from the IMMEDIATELY succeeding PY).

Example 3 — Casual Income Bar:

Mr. B has business loss of ₹2 Lakhs and lottery winnings of ₹5 Lakhs.

Analysis: Lottery winnings ₹5L are taxed at flat 30% = ₹1.5L tax. The business loss CANNOT be set off against lottery income. The ₹2L loss is carried forward.

⚠️ Common exam mistakes

Confusing speculative loss (4 years) with normal business loss (8 years).
Setting off unabsorbed depreciation against salary — explicitly disallowed.
Setting off any loss against lottery/casual income — fully prohibited.
Trying to set off losses against undisclosed income discovered during search/survey.
Counting the 8 years from the year of loss instead of the next year.
Treating LTCL carry forward as eligible against STCG — only LTCL → LTCG works.

Bare-Act text Sections 32(2), 71B, 72, 72A, 73, 73A, 74, 74A, 115BBE · Income-tax Act, 1961 · click to expand

Unabsorbed Depreciation - Any Head of Income except Salaries - Indefinite Period. Specified Business Loss - Profit of ANY Specified Business (Irrespective whether taken deduction u/s 35AD or not) - Indefinite Period. House Property Loss - 8 Years. Normal Business Loss - 8 Years. Long Term Capital Loss - LTCG - 8 Years. Short Term Capital Loss - STCG/LTCG - 8 Years. Speculative Business Loss - 4 Years. Loss from Owning & Maintaining Race Horses - 4 Years. NOTES: No Set off of Losses & Unabsorbed Dep is allowed against Undisclosed Income. Casual Incomes - Winnings from Lotteries & Games/Horse Races - taxable at Flat Rate 30% and No Set Off of any Loss is allowed against such Income.

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Period of Carry Forward for Various Losses

Worked example

⚠️ Common exam mistakes