Section 73A — Specified Business Loss (s. 35AD)

Function in the statutory architecture

Section 73A ring-fences losses of a "specified business" referred to in s. 35AD, the investment-linked deduction for businesses such as cold chains, warehousing and infrastructure. A loss computed in respect of a specified business can be set off only against the profits and gains of another specified business.

Any loss not so set off, or the whole loss if there is no income from another specified business, is carried forward to the following assessment year, set off against the profits of any specified business carried on by the assessee in that year, and the balance carried forward again "and so on". Sub-section (2) sets no limit on the number of years.

Operative consequences

• A specified business loss cannot be set off against income from any other business or any other head.
• The carry forward is not limited to eight years, unlike s. 72(3).
• Under s. 80, a loss under s. 73A(2) is carried forward only if it was determined in pursuance of a return filed under s. 139(3).
• For the 2025 Act, losses under s. 73A brought forward to a tax year beginning on or after 1 April 2026 are set off and carried forward against income computed under that Act (s. 536(2)(m)).

Status

Operative for assessment year 2026-27. Not omitted and not time-limited. The Finance Act, 2026 does not amend s. 73A.

The Income-tax Act, 1961 governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, the corresponding provision is s. 114.