Lahore 23°C
Karachi 28°C
Set off of losses
(1) Subject to sections 58 and 59, where a person sustains a loss for any tax year under any head of income specified in section 11, the person shall be entitled to have the amount of the loss set off against the person’s income, if any, chargeable to tax under any other head of income except income under the head salary for the year :
Provided that the adjustment of business loss shall not be allowed against income from property for the tax year.
(2) Except as provided in this Part, where a person sustains a loss under a head of income for a tax year that cannot be set off under sub-section (1), the person shall not be permitted to carry the loss forward to the next tax year.
(3) Where, in a tax year, a person sustains a loss under the head Income from Business and a loss under another head of income, the loss under the head Income from Business shall be set off last.
Provided that the adjustment of business loss shall not be allowed against income from property for the tax year.
(2) Except as provided in this Part, where a person sustains a loss under a head of income for a tax year that cannot be set off under sub-section (1), the person shall not be permitted to carry the loss forward to the next tax year.
(3) Where, in a tax year, a person sustains a loss under the head Income from Business and a loss under another head of income, the loss under the head Income from Business shall be set off last.
Amendment history (8)
- Inserted by the Finance Act, 2013.
- The words “or income from property” omitted by the Finance Act, 2021.
- Full stop substituted with a colon and thereafter a new proviso added by the Finance Act, 2025.
- Inserted by the Finance Act, 2002
- Inserted by the Finance Act, 2007.
- The word “company” substituted by the Finance Act, 2019.
- After word “Pakistan” the expression “, Gilgit-Baltistan” inserted by the Finance Act, 2019.
- The word “onward” substituted by the word “onward” by the Finance Act, 2014.
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 109
Unofficial reference, compiled from the FBR’s consolidated Income Tax Ordinance 2001 (amended up to 30 June 2026). Provided for general information only — not an official FBR publication and not legal or tax advice. Always verify against the official FBR text before relying on it for filing or any decision.