Losses in Speculation Business - (New) Section 113 / (Old) Section 73

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....on profits are insufficient during the year, the loss to be carried forward so that it may be utilised against future speculation profits and  • (i) be set off against the profits and gains, if any, of any speculation business carried on by him for such tax year; and • (ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following tax year and so on. Time Limit for Carry Forward of Speculation Losses [ Section 113(3) ] • No loss shall be carried forward under this section for more than four tax years immediately succeeding the tax year for which the loss was first computed. Priority of Set Off of Speculation Loss Before Carry Fo....

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....ly against the income of any speculation business. Such loss is allowed to be carried forward for 4 AYs immediately succeeding the AY for which the loss was computed. Section 43(5): defines a Speculative Transaction to mean a transaction in which a contract for purchase or sale of any commodity, including stocks and shares is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity or scrip. Notes:- • Filing of return before the due date is necessary for carry forward of such loss • Where the loss arises from illegal speculation business, then it cannot be carried forward. • If depreciation and capital expenditure on scientific research, if any, incurred i....