Carried forward losses are allowed to be adjusted with the income of the year. However, since carry forward of losses of different heads are allowed , it is of importance to know the order in which carried forward loss can be adjusted . Section 72(2) of the I T Act provides order in which lossses can be adjusted. It is provided that the business loss should be set off before setting off unabsorbed deprecation and so on. It is also provided that carried forward business loss will be set off against business head only after the current year’s deprecation, current capital expenditure on scientific research and expenditure on family planning have been claimed.