Speculation business losses remain restricted to speculation profits, with four-year carry-forward and special share-trading rules for companies.

Speculation business loss may be set off only against speculation-business profits and, if unabsorbed, carried forward for up to four immediately succeeding tax years. Under Section 113, the restriction applies to all assessees carrying on speculation business, and speculation loss is adjusted before specified carried-forward allowances. Companies dealing in shares may be deemed to conduct speculation business, subject to exclusions for companies principally engaged in share trading, banking, or loans and advances, and companies deriving income mainly from specified passive heads.

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