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Carry forward of capital losses
(1) Where a person sustains a loss for a tax year under the head Capital Gains (hereinafter referred to as a capital loss), the loss shall not be set off against the person’s income, if any, chargeable under any other head of income for the year, but shall be carried forward to the next tax year and set off against the capital gain, if any, chargeable under the head Capital Gains for that year.
(2) If a capital loss sustained by a person for a tax year under the head Capital Gains is not wholly set off under sub-section (1), then the amount of the loss not set off shall be carried forward to the following tax year, and so on, but no loss shall be carried forward to more than six tax years immediately succeeding the tax year for which the loss was first computed.
(3) Where a person has a loss carried forward under this section for more than one tax year, the loss of the earliest tax year shall be set off first.
(2) If a capital loss sustained by a person for a tax year under the head Capital Gains is not wholly set off under sub-section (1), then the amount of the loss not set off shall be carried forward to the following tax year, and so on, but no loss shall be carried forward to more than six tax years immediately succeeding the tax year for which the loss was first computed.
(3) Where a person has a loss carried forward under this section for more than one tax year, the loss of the earliest tax year shall be set off first.
Amendment history (7)
- Inserted by the Finance Act, 2005.
- Added by the Finance Act, 2003.
- Sub-section (1) omitted by the Finance Act, 2012. The omitted sub-section (1)
- Sub-section (2) omitted by the Finance Act, 2012. The omitted sub-section (2)
- any loss for such association” substituted by the Finance Act, 2012.
- omitted by the Finance Act, 2012.
- Sub section (5) substituted by the finance Act 2018,the substituted sub section (5) is
Amendment notes captured from the source page(s); they may include changes to neighbouring provisions.
Source FBR PDF page 112
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.