Section 291: intimation of loss

Introduction

The Assessing Officer issues a written order stating the loss he computes for sections 111(1), 112, 113(2) or 115(1) when an assessment establishes a loss and the assessee is entitled to carry it forward and set it off under those provisions.

Key takeaways

When intimation is required

The Assessing Officer must notify the assessee by an order in writing of the amount of loss computed by him for the purposes of section 111(1), 112, 113(2) or 115(1), where:

• in the course of assessing the assessee's total income, it is established that a loss has taken place; and
• the assessee is entitled to have that loss carried forward and set off under the relevant sections.

Scope and practical relevance

The written intimation concerns the amount computed by the Assessing Officer, not merely the loss asserted in the return or shown in the books. Both statutory conditions matter: assessment establishes a loss, and the assessee is entitled to carry it forward and set it off under a named provision.

The specific references are Section 111(1), 112, 113(2) and 115(1). Keep the loss category, amount and relevant tax year identifiable, because the conditions for future use come from the corresponding loss provision.

Limits and separate requirements

Section 291 records a qualifying computed loss; it does not independently relax the return-filing requirements, permitted set-off, duration or other conditions governing that loss. Those conditions must be checked separately.

An accounting loss is not necessarily the same as a tax loss. Nor is the amount claimed necessarily identical to the amount computed in assessment. Reconcile differences before carrying a figure into the next year.

Step-by-step assessment review

1. Identify the claimed tax loss and the named carry-forward provision relied on.

2. Compare the return computation with the assessment’s computed loss and check the relevant entitlement conditions.

3. Locate the written order notifying that amount under Section 291.

4. Maintain a year-by-year loss schedule and apply the relevant statutory restrictions before a later set-off.

Hypothetical assessment example

Hypothetical illustration: a return claims a qualifying loss of ₹1,00,000, while the assessment computes ₹80,000 and the assessee meets the relevant carry-forward conditions. The Section 291 written intimation should reflect the Assessing Officer’s computed amount. The taxpayer should reconcile the ₹20,000 difference and consider the available remedy separately; the original claim should not silently replace the assessed figure in the loss schedule.

Documents and reconciliation checklist

Return and assessment computations for the loss year.

The written intimation and the exact loss provision to which it relates.

A carry-forward schedule recording subsequent utilisation and the conditions for remaining losses.

Official amended Act source

• Income-tax Act, 2025 as amended by Finance Act, 2026: Section 291 and connected provisions

Step-by-step flow for a loss intimation under Section 291

1. 1

   Is the Assessing Officer assessing the total income of the assessee?

   Section 291 operates in the course of an assessment.

2. 2

   Is it established in that assessment that a loss has taken place?

   • No: No Section 291 order is needed.
   • Yes: Go to the next step.
3. 3

   Is the assessee entitled to carry forward and set off the loss?

   The entitlement must be under Section 111(1), 112, 113(2) or 115(1). Its conditions come from those sections, not from Section 291.

   • No: No Section 291 order is needed.
   • Yes: Go to the next step.
4. 4

   Notify the loss by an order in writing

   The Assessing Officer notifies the amount of the loss as computed by him for the purposes of those sections.

Practical checklist

Glossary

Computed loss

The loss amount worked out by the Assessing Officer for the specified statutory purposes.

Carry-forward schedule

A record tracking the loss by tax year, category, allowed amount and subsequent utilisation.

Frequently asked questions