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Section 111

Carry forward and set off of loss from capital gains

(1)
The unabsorbed capital loss for any tax year shall be carried forward to the subsequent tax year and shall be set off in the manner provided in sub-section (2). 20
(2)
The unabsorbed capital loss arising from transfer of capital asset, being––

(a) a long-term capital asset, may be set off only against capital gains, if any, from transfer of any other long-term capital asset during the subsequent tax year and so on; and

(b) a short-term capital asset, shall be set off against capital gains, if 25 any, from transfer of any other capital asset during the subsequent tax year and so on.

(3)
The unabsorbed capital loss referred to in sub-section (1), shall be carried forward to the following tax year, not being more than eight tax years immediately succeeding the tax year in which such loss was first computed. 30
(4)
In this section, “unabsorbed capital loss” means loss computed under the head “Capital gains” for any tax year, which has not been, or is not wholly, set off under section 108 for the said tax year.