Specified business losses remain ring-fenced, permitting set-off only against specified-business profits and carry-forward of unabsorbed losses.

Specified business losses may be set off only against profits and gains of specified businesses. Under Section 114 of the Income Tax Act, 2025, where current-year specified-business profits are insufficient or absent, the unadjusted loss may be carried forward and set off against specified-business profits in subsequent tax years. Under the earlier regime, specified-business losses could be carried forward until set off, subject to timely filing of the return of loss.

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