The section overrides the rest of the Chapter to impose a single condition on carrying losses forward. No loss that has not been determined in pursuance of a return filed under section 263(1) may be carried forward and set off under section 111(1), 112(1), 113(2), 114(2) or 115(2).
Why it is there
A loss claimed for the first time years later cannot be checked against the year in which it is said to have arisen. The section makes the return under section 263(1) the only gateway for a loss into the carry-forward machinery, so that the figure carried forward is one determined on a return the Department has had before it.
Who it applies to
Any assessee seeking to carry forward and set off a loss under section 111(1), 112(1), 113(2), 114(2) or 115(2)
The Assessing Officer determining whether a loss is available for carry forward
What this means in practice
The condition is about determination, not merely claiming: the loss must have been determined in pursuance of a return filed under section 263(1). If no such return was filed for the year the loss arose, the loss is unavailable however well documented in the books. The bar is confined to the five provisions named, so a carry-forward running otherwise is not addressed here. The practical consequence is that the return for a loss year has to be filed, even where there is no tax to pay and nothing else compels a filing.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
A firm makes a business loss of Rs. 40 lakh in a tax year and, having no tax to pay, files no return for that year. In the next year it earns a profit of Rs. 60 lakh and seeks to set off the brought forward loss. Section 121 stops it: the Rs. 40 lakh was never determined in pursuance of a return filed under section 263(1), so it cannot be carried forward and set off under section 111(1), and the whole Rs. 60 lakh is taxable.
Where you meet this section
In the loss carried forward schedule of the return, and in an assessment order or intimation disallowing a brought forward loss because no return was filed for the year in which it arose.
The words themselves
no loss which has not been determined in pursuance of a return filed under section 263(1), shall be carried forward and set off
Section 121, Income-tax Act, 2025.
What people get wrong
Thinking a loss shown in audited accounts is enough. The section requires it to have been determined in pursuance of a return filed under section 263(1).
Reading the bar as covering every carry forward in the Act. It names sections 111(1), 112(1), 113(2), 114(2) and 115(2) and no others.
Skipping the return for a loss year because no tax is payable. Without it the loss is lost for the listed provisions.
Assuming a loss first claimed during assessment proceedings can still be carried forward. It has not been determined in pursuance of a section 263(1) return.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 13/2023 — Condonation of delay under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 for returns of income claiming 2023-07-26
Circular 1/2015 — Explanatory notes to the provisions of the finance no.2 act 2014 2015-01-21
Circular No. 10/2014 [F.No.178/84/2012-ITA-I] — Section 80-IA, sub-clause (iii) of sub-section (4) of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial un 2014-05-06
Circular No. 10/2005 — Definition of "Port" as Infrastructural Facility for the Purpose of Sections 10(23G) and 80-IA of the Income-tax Act, 1961 2005-12-16
Circular No. 7/2002 — Section 80-IA l Profits and Gains from Industrial Undertakings, ETC., Engaged in Infrastructure Development, ETC 2002-08-26
Circular No. 788 — Section 80-IB l Profits and Gains from Certain Industrial Undertakings Other Than Infrastructure Development Undertakings 2000-04-11
Circular No. 733 — 565-567. Whether Build-Own-Lease-Transfer (BOLT) Scheme of Indian Railways shall be eligible for benefit under section 80-IA, sinc 1996-01-03
Circular No. 731 — 604. Eligibility for deduction under section 80-O in case of receipt of brokerage by reinsurance agent, operating in India on beha 1995-12-20
Circular No. 705 — 613. Procedure regarding grant of approval under section 80 RRA 1995-06-20
Circular No. 700 — 603. Whether benefit of section 80-O would be available if technical and professional services, though rendered outside India, are 1995-03-23
Circular No. 683 — Section 80 l Loss - Submission of Return for 1994-06-08
Circular No. 575 — 545. Whether ‘convertible foreign exchange’ does not include remittances from Nepal and Bhutan 1990-08-31
Circular No. 533 — 602. Application for approval of agreement to be made in prescribed form and verified in prescribed manner 1989-03-27
Circular No. 246 — Section 8OU l Totally Blind or Physically Handicapped Persons 1978-09-20
Circular No. 187 — Section 80-O l RO Yalties, ETC., from Certain Foreign Enterprises 1975-12-23
Circular No. 57 — Section 80-I l Profits and Gains from Industries After Certain Date 1971-03-23
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Notification No. 01/2013 — Section 80-IA, Sub-clause (iii) of sub-section (4) of the Income-tax Act, 1961 - Deductions - In respect of profits and gains from 2013-01-08
Notification No. 48/2012 — Section 80-IA, Sub-clause (iii) of Sub-section (4) of the Income-tax Act, 1961 - Deductions - in Respect of Profits and Gains from 2012-11-06
Notification No. 47/2012 — Section 80-IA, Sub-clause (iii) of Sub-section (4) of the Income-tax Act, 1961 - Deductions - in Respect of Profits and Gains from 2012-11-06
Notification No. 17/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2012-05-11
Notification No. 13/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and Gains from Industrial Infrastructure Undertakings, ETC. - Not 2012-03-22
Notification No. 10/2012 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2012-02-21
Notification No. 11/2011 — Income-tax : Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertaking 2011-02-24
Notification No. 47 — Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Not 2010-07-09
Notification No. 80 — Section 80-IA of the Income-tax Act, 1961 – Deductions – Profits and gains from industrial undertakings, etc, - Notified undertaki 2009-10-27
Notification No. 106 — Industrial Park Scheme, 2008 - Amendments in Form Ips-1 2008-11-28
Notification No. 98 — Income-tax (Eighth Amendment) Rules, 2008 - Insertion of rule 18DDA and Form No. 10CCBD 2008-10-22
Notification No. 89 — Section 80-IC (2)(A) of the Income-tax Act 1961 – Deduction – Special Provision in Respect of Certain Undertakings or Enterprises 2008-08-27
Notification No. 76 — A notification under section 10A of the Income-tax Act, 1961 2008-07-02
Notification No. 66 — Following undertakings notified under section 80 2008-05-30
Notification No. 03 — A notification under section 80 of the Income-tax Act, 1961 2008-01-08
Notification No. 02 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2008-01-08
Notification No. 281 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2007-11-27
Notification No. 211 — Section 80-IA(4)(iii) of the Income-tax Act, 1961 - Deductions - In respect of profits and gains from industrial undertakings, etc 2007-07-31
Notification No. 67 — Amendment of the Income-tax Rules under section 32 of the Income-tax Act, 1961 2005-02-28
Notification No. 58 — Amendment of the Income-tax Rules under section 40A of the Income-tax Act, 1961 2005-02-17
Notification No. 43 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2005-02-04
Notification No. 142 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2004-04-19
Notification No. 49 — A notification under section 3 of the Income-tax Act, 1961 2004-02-13
Notification No. 41 — Industrial areas in the State of Sikkim in column (2) of the Schedule below notified under section 80 2004-02-06
Notification No. 292 — Amendment of the Income-tax Rules under section 23 of the Income-tax Act, 1961 2003-11-13
Notification No. 156 — Amendment of the Income-tax Rules under section 80 of the Income-tax Act, 1961 2003-06-18
Notification: 124 Date of Issue : 31/5/2002 — 4. The percentage of land to be earmarked for commercial use shall not be more than 10 per cent of the allocable area. 2002-05-31
Notification No. 85E- — A notification under section 80 of the Income-tax Act, 1961 2001-01-31
Notification No. 24- — A notification under section 80 of the Income-tax Act, 1961 2001-01-31
Notification No. 1692 — Multilevel Computerised Car Parking as infrastructure facility notified under section 10 2000-07-13
Notification No. 285(E) — An undertaking developed and being maintained and operated by Western India Kinfra Ltd notified under section 80 2000-03-28
Notification No. 11291 — An undertaking developed and being maintained and operated by M/s International Tech Park Limited notified under section 80 2000-03-28
Notification No. 11185 — An undertaking developed and being maintained and operated by the Wise Industrial Park Limited notified under section 80 1999-12-28
Notification No. 11174 — A notification under section 80 of the Income-tax Act, 1961 1999-12-20
Notification No. 11103 — A notification under section 80 of the Income-tax Act, 1961 1999-10-06
Notification No. 11102 — A notification under section 80 of the Income-tax Act, 1961 1999-10-06
Notification No. 11022 — Following industries in the North-Eastern Region to be the industries notified under section 80 1999-08-04
S.O. 627(E) — Following industries in the North-Eastern Region to be the industries notified under section 80 1999-08-04
Notification No. 10963 — A notification under section 80 of the Income-tax Act, 1961 1999-06-16
S.O. 447(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-16
Notification No. 10958 — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
Notification No. 10957 — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
S.O. 440(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
S.O. 439(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-15
Notification No. 10956 — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
Notification No. 10955 — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 435(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 434(E) — A notification under section 80 of the Income-tax Act, 1961 1999-06-14
S.O. 401(E) — A notification under section 80 of the Income-tax Act, 1961 1999-05-31
Notification No. 10942 — A notification under section 7 of the Income-tax Act, 1961 1999-05-28
S.O. 391(E) — A notification under section 80 of the Income-tax Act, 1961 1999-05-28
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 121. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
Liberty India v CITSupreme CourtHelps departmenttagged s.80-IB Can I count depb credits and duty drawback in the profits for my 80-ib deduction?
PCIT v Wipro LtdSupreme CourtHelps departmenttagged s.80 A declaration was required by the due date and you filed it late. Is that fatal?
Balaji Landmarks LLP v CBDTHigh CourtHelps taxpayertagged s.80 I filed my loss return late on my ca's advice and lost the carry-forward. Will the delay be condoned?
Coromondel Cabeles (P) Ltd v ACITHigh CourtCuts both waystagged s.80-IB(10) I never claimed section 80-ib(10) in my return under section 139(1). Can the High Court still let me have the deduction in a section 260A appeal?
Gateway Terminals India v DCITHigh CourtHelps taxpayertagged s.80-IA Does interest on fixed deposits I was obliged to make for the eligible business, and interest on the refund of TDS my customers wrongly deducted…
Ranbaxy Laboratories Ltd v CITHigh CourtHelps taxpayertagged s.80-I Same point, in Delhi: if the recorded grounds fail, can the officer still tax an unrelated item?
ACIT v Monarch Innovative TechnologiesITATHelps taxpayertagged s.80-IC My return went in by the due date but I claimed the deduction for the first time in a revised return. Does section 80AC block the claim?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.