Comparison of Section 111 "Carry forward and set off of loss from Capital gains." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... in a tax year are carried forward and set off in subsequent years. The provisions affect taxpayers realizing capital gains/losses and the tax administration in assessing carry-forward claims. Effective date or commencement is Not stated in the document. Background & Scope Statutory hooks: the documents are framed as Clause/Section 111 under the heading "SET OFF, OR CARRY FORWARD AND SET OFF OF LOSSES" in the Income Tax Bill/Act, 2025. Both texts address the treatment of losses computed under the head "Capital gains" that are not fully set off in the year of computation. The Bill (old version) expressly defines the term "unabsorbed capital loss" in its subsection (4); the enacted Section uses the phrase "loss computed under the head '....

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....ion (eight years). The express cross-reference to section 108 in the definition suggests the intended sequence: first apply intra-year set off u/s 108; residual unabsorbed loss becomes eligible for carry forward under Clause 111. Any broader policy intent (e.g., rationale for eight-year limit) is Not stated in the document. Exceptions/Provisos No provisos or express exceptions are contained in Clause 111 other than the bifurcated set-off limitation between long-term and short-term losses and the eight-year temporal cap. Specific exemptions, conditions, or special cases (e.g., treatment on change of ownership, mergers, or conversions) are Not stated in the document. Illustrations * Example 1: Taxpayer A incurs a long-term capital loss....

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....h aggregation of assets, clubbing, or transferor-transferee adjustments is Not stated in the document. Differences Between the Clause 111 of the Income Tax Bill, 2025 - Old Version and Section 111 of the Income-tax Act, 2025 Topic Clause 111 (Bill, Old Version) Section 111 (Act, Enacted) Terminology/Defined Term Introduces and defines "unabsorbed capital loss" in subsection (4): loss computed under head "Capital gains" not wholly set off u/s 108. Uses phrase "loss computed under the head 'Capital gains'"; no separate defined term "unabsorbed capital loss". Structure and Subdivision Organised into subsections (1)-(4) with explicit cross-reference to "sub-section (2)" for set-off mechanism. Organised into subsection....

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....#39;s explicit definition of "unabsorbed capital loss" clarifies the point at which carry forward applies (i.e., after set-off u/s 108); the enacted Section omits the defined label but retains the practical concept. This definitional clarity reduces potential ambiguity in assessing whether a loss is eligible for carry forward. * Practical impact - Substance: The substantive set-off rules are materially the same (short-term losses can be set off against any capital gains; long-term losses only against long-term gains) and both limit carry forward to eight years. Therefore, practical tax outcomes for most taxpayers remain unchanged. * Practical impact - Drafting/interpretation risk: Differences are largely drafting and labelling; howe....