Section 157 and Section 158 of Income Tax Act 1961: Intimation of Loss and Firm Assessment
Section 157 of the Income-tax Act, 1961 required the Assessing Officer to notify an assessee in writing of a loss computed for specified carry-forward and set-off provisions. Section 158 was a historical provision requiring written intimation of the assessed income of certain firms and its apportionment among partners for assessment year 1992-93 or an earlier assessment year.
Section 157: Intimation of Loss
Where, during assessment of an assessee's total income, it was established that a loss had occurred and the assessee was entitled to carry forward and set off that loss under the specified provisions, Section 157 required the Assessing Officer to notify the assessee by a written order of the amount of loss computed for that purpose.
The provision therefore dealt with formal determination and communication of an eligible carry-forward loss. It referred to the loss provisions in Section 72(1), Section 73(2), Section 74(1) or 74(3), and Section 74A(3) of the Income-tax Act, 1961.
Loss provisions referred to in Section 157
| 1961 Act provision | General subject |
|---|---|
| Section 72(1) | Carry forward and set off of business losses, subject to the statutory conditions. |
| Section 73(2) | Carry forward and set off of losses in speculation business, subject to the applicable rules. |
| Section 74(1) and 74(3) | Carry forward and set off of capital losses and the relevant statutory period and conditions. |
| Section 74A(3) | Carry forward and set off of specified losses connected with the activity of owning and maintaining race horses. |
Why the written order matters
Section 157 specifically required notification by an order in writing. The amount notified is the loss computed by the Assessing Officer for the purposes of the specified carry-forward provisions. Whether the loss may actually be carried forward and set off in a later year also depends on the other applicable provisions governing filing of returns, eligibility, time limits and the nature of the loss.
Section 157A: Faceless Rectification, Amendments and Issuance of Notice or Intimation
The uploaded page also links to Section 157A, which was introduced to enable a notified faceless scheme for proceedings relating to rectification under Section 154, other amendments under Section 155, notice of demand under Section 156 and intimation of loss under Section 157. The stated statutory objectives included reducing interface to the extent technologically feasible, optimising resources and enabling team-based proceedings with dynamic jurisdiction.
Under the Income-tax Act, 2025, the corresponding enabling framework for faceless proceedings is reorganised in Section 532 rather than retained as a separate provision corresponding only to Section 157A.
Section 158: Intimation of Assessment of Firm
Section 158 was expressly historical. It applied where, for the assessment year commencing on 1 April 1992 or an earlier assessment year, a registered firm was assessed, or an unregistered firm was assessed under the then applicable Section 183(b). In such a case, the Assessing Officer was required to notify the firm by an order in writing of:
- the amount of the firm's total income assessed; and
- the apportionment of that income among the several partners.
Because the provision was confined to assessment year 1992-93 or earlier under the former firm-assessment system, it has no general application to current firm assessments. The official section-mapping material for the Income-tax Act, 2025 identifies Section 158 as omitted.
Section 291 of the Income-tax Act, 2025: Intimation of Loss
For matters governed by the Income-tax Act, 2025, Section 291 is the corresponding provision for intimation of loss. It requires the Assessing Officer to notify the assessee by a written order of the amount of loss computed where, in assessment of total income, a loss is established and the assessee is entitled to carry forward and set it off under the provisions specified in Section 291.
| Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|
| Section 157 - Intimation of loss | Section 291 - Intimation of loss |
| Section 157A - Faceless rectification, amendments and issuance of notice or intimation | Reorganised within Section 532 - Faceless proceedings |
| Section 158 - Intimation of assessment of firm | Omitted; the provision was historical and related to assessment year 1992-93 or earlier |
Practical Points
- Identify whether the loss relates to a tax or assessment year governed by the Income-tax Act, 1961 or the Income-tax Act, 2025.
- Check the nature of the loss and the specific carry-forward provision applicable to it.
- Do not treat the written intimation of loss as overriding separate statutory conditions for eligibility to carry forward and set off a loss.
- Section 158 should be treated as a historical provision rather than as a current procedure for assessment of partnership firms.
- For proceedings preserved under the 1961 Act after 1 April 2026, apply the transition and savings provisions before choosing the governing section.
Official Income-tax Resources
For current statutory text and transition guidance, refer to the official Income Tax Department tax laws portal, the official Income-tax Act, 2025 resources and transition guidance, the official Income-tax Act, 2025 PDF, and the Income Tax e-Filing portal.
Updated: 29 September 2026. The applicable provision depends on the relevant tax or assessment year, nature of loss, assessment order and the repeal and savings rules governing the proceeding.