Comparison of Section 115 "Set off and carry forward of losses from specified activity." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....es may be set off and carried forward. The rule primarily affects taxpayers engaged in the specified activity (owners/maintainers of race horses) and the tax administration. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 115 of the Income Tax Bill, 2025 (Old Version) addresses "set off, or carry forward and set off of losses" specifically for the "specified activity" defined as owning and maintaining race horses. The provision establishes the scope of set off (against income from the same specified activity only), the carry forward regime for unabsorbed losses, the temporal limit for carry forward (four succeeding tax years), and specific definitions related to stake money, loss com....

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....roviso allowing cross-set off, nor any alternative treatment for amalgamations, transfer of business, or change in ownership. "Only when the specified activity is carried on by the assessee in that tax year" conditions availability of set off - effectively an operational proviso. Other exceptions: Not stated in the document. Illustrations * Example 1: An assessee incurs a loss of X in tax year N from owning race horses and has no stake money income in year N. Under Clause 115, the loss cannot be set off against other incomes in year N and will be carried forward as an "unabsorbed loss" to year N+1 and may be set off only against stake-money income of the specified activity in N+1, and only if the assessee carries on that activity in N+1.....

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....hall not be set off against") emphasises the prohibition. No substantive change in tax outcome is apparent from wording alone. * Carry Forward Mechanism and Language: - Bill Clause 115(2) uses "unabsorbed loss ... shall be carried forward to the subsequent tax year and shall be set off ... only against the income from specified activity" and additionally conditions set off "only when the specified activity is carried on by the assessee in that tax year." - Act Section 115(2) describes a stepwise carry forward: if loss cannot be wholly set off under sub-section (1), it "shall be carried forward ... and (i) be set off against the income, if any, of the specified activity carried on by him for such tax year; and (ii) if the loss cannot be wh....

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....ct breaks out terms slightly differently (introducing "horse race", "race horses") potentially aiding clarity on the subject-matter; the Bill's explicit definition of "unabsorbed loss" provides a specific label for losses carried forward in that clause. Functionally, definitions align closely; no substantive change to tax treatment is evident. * Stylistic and Structural Reordering: - The Act presents definitions under subsection (4) and enumerates subparagraphs (a)-(e) with slightly different ordering and labelling; the Bill uses similar subparagraphs (a)-(e). * Practical impact: Purely drafting/formatting differences without substantive divergence in tax consequences. Practical Implications * Compliance and risk areas: Taxpayers....