Addresses the set-off of losses under various heads of income In Clause 109 of Income Tax Bill, 2025 Vs. Section 71 of the Income Tax Act, 1961

Set-off of losses: new limits bar using business and capital losses to reduce salary and other non-capital income.

Clause 109 permits set-off of losses under any income head except capital gains against income from other heads in the same year, subject to limits: business losses cannot be set off against salary income; house property losses are set off against other heads only up to a capped amount; and capital gains losses cannot be set off against non-capital income. The clause thus confines capital losses within their category and imposes head-specific restrictions requiring careful tax planning and record-keeping.