---

After the government publishes a reliable translated text in English through an official gazette, we will incorporate the Authentic English Text here.

---

37.Set off of losses: 

Where, in respect of any assessment year, the net result of computation of income under any head is a loss, the assessee shall, subject to the other provisions of this Ordinance, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head:

Provided that any loss in respect of any speculation business or any loss under the head “Capital gains” shall be set off only against any income in respect of speculation business or any income under the head “Capital gains”:

Provided further that any loss from any source, income of which is exempted from tax or income of which is taxed at a reduced rate, shall not be set off against any income from any source:

Provided further that for the purposes of this section the Deputy Commissioner of Taxes shall, in computing any loss, deduct any amount received in cash as subsidy from the Government:

Provided further that any loss in respect of any income from business or profession shall not be so set off, or be carried forward to succeeding assessment year or years for set off, against any income from house property: 

Provided further that any loss in respect of any income from any head shall not be so set off against any income from manufacturing of cigarette 6[, bidi, zarda, chewing tobacco, gul or any other smokeless tobacco or tobacco products.

38.Carry forward of business losses: 

Where, for any assessment year, the net result of the computation of income under the head “Income from business or profession” is a loss to the assessee, not being a loss sustained in a speculation business, and such loss has not been wholly set off under section 37, so much of the loss as has not been so set off, the whole of the loss, where the assessee has no income under any other head or has income only under the head “Capital gains”, shall be carried forward to the next following assessment year, and-

(a) it shall be set off against the income, if any, from the business or profession for which the loss was originally computed if such business or profession continued to be carried on by him in the income year; and

(b) if the loss cannot be wholly so set off, the amount of the loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.

39.Carry forward of loss in speculation business: 

(1) Where, for any assessment year, the result of computation of income in respect of any speculation business carried on by the assessee is a loss, it shall be set off only against the income, if any, from any other speculation business carried on by him and assessable for that assessment year.

(2) Where, for any assessment year, any loss computed in respect of a speculation business has not been wholly set off under sub-section (1), so much of the loss as has not been so set off, or the whole loss where the assessee has no income from any other speculation business, shall, subject to the provisions of this Ordinance, be carried forward to the next following assessment year, and- 

(a) it shall be set off against the income, if any, from any speculation business carried on by him and assessable for that assessment year; and

(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.

40.Carry forward of loss under the head “Capital gains”: 

(1) Where, in respect of any assessment year, the net result of computation of income from any source under the head “Capital gains” is a loss, it shall be set off only against income from any other source falling under that head and assessable for that year.

(2) Where, for any assessment year, any loss computed under the head “Capital gains” has not been wholly set off under sub-section (1), so much of the loss as has not been so set off, or the whole loss where the assessee has no income from any other source falling under that head, shall, subject to the provisions of this Ordinance, be carried forward to the next following assessment year, and-

(a) it shall be set off against income, if any, of the assessee under that head and assessable for that year; and

(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the next assessment year and so on for not more than six successive assessment years.

(3) Where, in respect of any assessment year, the loss computed under the head “Capital gains” does not exceeds five thousand taka it shall not be carried forward and where it exceeds five thousand taka only so much of such loss shall be carried forward as exceeds five thousand taka.

42.Conditions and limitations of carrying forward of loss, etc:

(3) In the case of 1[a firm],-

(a) Where the assessee is the firm, the loss sustained by it under any head of income shall be set off under section 37 only against the income of the firm under any other head and not against the income of any of the partners of the firm; and

(b) where the assessee is a partner of the firm, he shall not be entitled to have any loss, sustained by the firm carried forward and set off against his own income.

(3A) Where the assessee is an Association of Persons, the loss sustained by it under any head of income shall be set off under section 37 only against the income of the Association of Persons under any other head and not against the income of any of the members of the Association of Persons.

(3B) Where the assessee is a member of the Association of Persons, he shall not be entitled to have any loss sustained by the Association of Persons carried forward and set off against his own income.”

(4) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, no person, other than the person incurring the loss, shall be entitled to have the loss in such business or profession set off against his income under any other head.