Understanding the Tax Treatment of Speculation Losses in Clause 113 of Income Tax Bill, 2025 Vs. Section 73 of Income Tax Act, 1961

Set-off of speculation losses confined to speculation profits; carry forward limited and prioritised before other allowances.

Clause 113 confines adjustment of losses from a speculation business to profits of another speculation business in the same year; permits carry forward of unabsorbed speculation losses to subsequent years for set off only against speculation business profits within a limited statutory period; requires that unabsorbed speculation losses be set off before certain carried forward allowances; and defines both speculation business (including a deeming rule for share trading to that extent) and specified exceptions to that classification.