Operating losses can be carried forward indefinitely, subject to following restrictions on specific type of losses:

• Losses from agricultural business can be offset against agricultural income;
• Losses from each mining and petroleum license can be offset against the income from the same mining or petroleum license area;
• Foreign-sourced losses (including foreign sourced investment losses) can be offset against the foreign-sourced income (including foreign sourced investment income);
• Losses from investments and speculative transactions can be offset against income from investments and speculative transactions, respectively;

Operating losses may be forfeited and are no longer available for carry-forward in case of a change in underlying ownership or control of a company by more than 50% any time during a period of 3 previous years unless the company continues to conduct the same business and does not engage in new business or investment for a period of 2 years after the change.

Losses brought forward in respect of the following  can be offset against 70% of the taxable income for a tax year:

• Companies holding petroleum exploration license, mineral license and license in respect of midstream and downstream activities and balance of the unabsorbed losses can be carried forward to subsequent years; or
• Companies having losses in the 4 earlier consecutive tax years, effective 1 July 2020. However, entities undertaking agricultural business or providing health or education services are exempted from the provision.

The carry-back of losses is not permitted, except in the case of long-term contracts.

In case of long term contracts, operating losses incurred in the year of completion of long term contracts or in previous periods, which are attributable to such long term contracts can be carried back to a previous year of income and treated as an unrelieved loss for that year. The amount considered as unrelieved loss of a tax year can be set-off to the extent of the income of that tax year.

Long-term contract means a contract for the manufacture, installation, construction, or related activities, which is not completed within the tax year of commencement of the contract.