Under the Income-tax Act, 2025, unabsorbed depreciation can be carried forward for set-off purpose :

Under section 33(11) of the Income-tax Act, 2025 (formerly s.32(2) of the Income-tax Act, 1961), where the profits and gains of a tax year are insufficient to absorb the depreciation allowance, the amount not allowed is added to the allowable depreciation of the succeeding tax year and is deemed to be eligible for deduction in that year, 'and so on for the succeeding tax years'. No time limit is prescribed, so unabsorbed depreciation can be carried forward for an unspecified (unlimited) period. By contrast, business losses can be carried forward for eight tax years (section 112(2)) and speculation losses for four tax years (section 113(3)), and under section 112(3) brought-forward business loss is set off before unabsorbed depreciation.