Section 157 of the Income-tax Act, 1961: Intimation of Loss
Section 157 of the Income-tax Act, 1961 requires the Assessing Officer to communicate, through a written order, the amount of an eligible loss determined during assessment for carry-forward and set-off. For tax years beginning on or after 1 April 2026, the corresponding provision is section 291 of the Income-tax Act, 2025.
What does intimation of loss mean?
An intimation of loss under section 157 is a written order informing the taxpayer of the amount of loss computed by the Assessing Officer which qualifies for carry-forward and set-off under specified provisions. It is distinct from merely reporting a loss in an income-tax return. The assessment and statutory conditions determine whether a loss can actually be carried forward.
Section 157: statutory requirement
Where an assessment establishes a loss that the assessee is entitled to carry forward and set off under section 72(1), 73(2), 74(1) or 74(3), or 74A(3), the Assessing Officer must notify the assessee in writing of the amount computed for the relevant provision. This is a plain-language restatement of the section; consult the official text of section 157 for the enacted wording.
Types of losses covered
| 1961 Act provision | Nature of loss | General carry-forward period |
|---|---|---|
| Section 72(1) | Eligible non-speculative business loss | Eight assessment years |
| Section 73(2) | Speculation business loss | Four assessment years |
| Section 74(1), 74(3) | Short-term or long-term capital loss, subject to applicable set-off rules | Eight assessment years |
| Section 74A(3) | Loss from owning and maintaining race horses | Four assessment years |
These are general statutory limits; eligibility, the nature of permitted set-off and other restrictions must be checked for the relevant year. Section 157 does not itself create an entitlement to carry forward an otherwise ineligible loss.
Conditions and practical procedure
- File a valid return: For many categories of losses, sections 80 and 139(3) of the 1961 Act require a return filed within the prescribed time for carrying the loss forward, subject to applicable exceptions and relief.
- Verify the assessed figure: Compare the loss claimed in the return with the amount determined in the assessment and communicated in writing.
- Keep supporting records: Retain the return acknowledgment, computation, assessment order, loss intimation and any appellate or rectification orders.
- Claim set-off in a later year: Observe the relevant time limit and the restriction on the income against which the particular loss may be adjusted.
- Correct an error: Consider rectification under section 154 for a mistake apparent from the record, or an available statutory appeal where the issue requires adjudication.
Income-tax Act, 2025: section 291
Section 291 of the Income-tax Act, 2025 provides for written intimation of the loss computed by the Assessing Officer where an assessment establishes an eligible carry-forward loss. It refers to sections 111(1), 112, 113(2) and 115(1).
| Income-tax Act, 1961 | Income-tax Act, 2025 | Subject |
|---|---|---|
| Section 157 | Section 291 | Intimation of loss |
| Section 72 | Section 112 | Business loss |
| Section 73 | Section 113 | Speculation loss |
| Section 74 | Section 111 | Capital loss |
| Section 74A | Section 115 | Race horse loss |
Under the transition provisions of section 536 of the Income-tax Act, 2025, eligible losses from earlier years may continue to be carried forward under the applicable saved rules; the commencement of the new Act does not restart the original carry-forward period.
Illustration
Suppose a taxpayer's eligible non-speculative business loss for an earlier assessment year is assessed at Rs. 4,00,000. The Assessing Officer must communicate the computed loss in writing under section 157, where its conditions apply. The taxpayer may use the eligible balance in later years within the prescribed period, subject to the business-loss set-off restrictions. If the assessed amount differs from the return, the taxpayer should review the order promptly.
Frequently asked questions
Does section 157 allow every reported loss to be carried forward?
No. It addresses notification of a loss established in assessment and eligible under the specified provisions. Filing requirements and substantive set-off restrictions still apply.
Is a section 157 intimation the same as a section 143(1) intimation?
No. Section 143(1) concerns processing of returns; section 157 specifically requires a written order notifying an eligible assessed loss.
What is the corresponding provision under the 2025 Act?
Section 291 of the Income-tax Act, 2025.
Official legal sources
- Income Tax Department: Section 157, Income-tax Act, 1961
- Income Tax Department: Section 291, Income-tax Act, 2025
- Income-tax Act, 1961: official consolidated text
- Income-tax Act, 2025: official text, including section 536
- Income Tax Department: transition FAQs on losses
Updated: 26 October 2026. This article is general legal information; the applicable statutory text and facts of the assessment year control.