diff --git a/python/tvm/script/parser/core/diagnostics.py b/python/tvm/script/parser/core/diagnostics.py
index d673e0eb139f..ad7ae5034780 100644
--- a/python/tvm/script/parser/core/diagnostics.py
+++ b/python/tvm/script/parser/core/diagnostics.py
@@ -163,9 +163,10 @@ def findsource(obj):
                 name = tokens[1].split(":")[0].split("(")[0] + "<locals>"
             elif tokens[0] == "class":
                 name = tokens[1].split(":")[0].split("(")[0]
+            # pop scope if we are less indented
+            while scope_stack and indent_info[scope_stack[-1]] >= indent:
+                scope_stack.pop()
             if name:
-                while scope_stack and indent_info[scope_stack[-1]] >= indent:
-                    scope_stack.pop()
                 scope_stack.append(name)
                 indent_info[name] = indent
                 if scope_stack == qual_names:
diff --git a/tests/python/unittest/test_tvmscript_parser_source.py b/tests/python/unittest/test_tvmscript_parser_source.py
index f5dc17fdfe56..359583c1aa06 100644
--- a/tests/python/unittest/test_tvmscript_parser_source.py
+++ b/tests/python/unittest/test_tvmscript_parser_source.py
@@ -82,5 +82,20 @@ def test_source_ast():
     assert isinstance(for_block, doc.With) and len(for_block.body) == 2
 
 
+def test_nesting_parsing():
+    class dummy:
+        pass
+
+    for i in range(1):
+
+        @tvm.script.ir_module
+        class Module:
+            @T.prim_func
+            def impl(
+                A: T.Buffer[(12, 196, 64), "float32"],
+            ) -> None:
+                T.evaluate(0)
+
+
 if __name__ == "__main__":
     tvm.testing.main()