Section 291 of the Income-tax Act, 2025 — Intimation of Loss

In plain language

What Section 291 actually says

Section 291 of the Income-tax Act, 2025 is a short but important procedural provision titled "Intimation of loss." It casts a mandatory duty on the Assessing Officer (AO) to formally notify the taxpayer, by a written order, of the amount of loss that the AO has computed during assessment — where that loss is eligible to be carried forward and set off in later years.

In plain words: when the tax department assesses your return and works out that you made a loss that you can carry forward, the AO cannot keep that figure to himself. He must put it in writing and tell you the exact amount. This becomes the official, on-record loss figure you carry into future years.

• Who issues it: the Assessing Officer (now largely faceless/electronic).
• Who receives it: any assessee — individual, HUF, firm, LLP, company, etc. — who has a carry-forwardable loss.
• Form: "an order in writing" stating the amount of the loss computed.

Which losses are covered

Section 291 applies where a loss is established and the assessee is entitled to carry it forward and set it off under the specified loss provisions of the 2025 Act — namely section 111(1) (capital losses), section 112 (business/profession losses), section 113(2) (speculation business losses) and section 115(1) (losses of a specified activity/business). The intimation therefore spans the main carry-forward buckets:

• Business loss — carried forward up to 8 tax years, set off only against business profits.
• Capital loss — carried forward up to 8 tax years, set off only against capital gains.
• Speculation business loss — carried forward up to 4 tax years, set off only against speculation profits.
• Specified-activity loss — set off only against income of the same specified activity.

Why this section matters

The intimation does two crucial things:

• Certainty: it fixes the loss figure officially, so there is no later dispute about "how much loss can I actually carry forward?"
• Protection of your right to appeal: because the loss is quantified in a written order, if you disagree with the AO's computation (say he reduced your loss), you have a determined figure to challenge in appeal. Without an intimation, you could be denied set-off years later with no clear record.

How it interacts with related provisions

Section 291 is the notification hinge that connects assessment (the AO computing total income/loss) with the carry-forward machinery (sections 111–115). It works alongside the return-filing and assessment intimation provisions: to actually be entitled to carry forward most losses, you must generally have filed your return within the due date. Section 291 does not create the right to carry forward — sections 111 to 115 do — it simply ensures the AO communicates the computed amount. It is the 2025 Act's re-enactment of Section 157 of the Income-tax Act, 1961, with no change in substance.

Practical implications for taxpayers

• Keep the intimation safe — it is your proof of the carry-forward balance for up to 8 years.
• Reconcile it with your return — if the AO's figure is lower than what you claimed, act quickly (rectification/appeal) rather than waiting until you try to set off the loss.
• Losses from years before 1 April 2026 are protected by transitional rules in section 536(2) and continue to be carried forward under the new Act.
• Absence of an intimation is procedural, not fatal — courts under the old Section 157 held that failure to issue the order does not by itself destroy a genuinely established loss, but having the written order avoids disputes.