Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Act RulesBills
    Doctrine of Reasonable Cause in Tax Penalties : Clause 470 of the Income Tax Bill, 2025 Vs. Section ...
    Act RulesBills
    Voluntary Disclosure and Penalty Waiver under Indian Tax Law : Clause 469 of the Income Tax Bill, 20...
    Act RulesBills
    Penalties for Non-Compliance with TDCAN/TAN Requirements : Clause 468 of the Income Tax Bill, 2025 V...
    Act RulesBills
    Penalty Provision for PAN/Aadhaar Non-Compliance in Indian Tax Law : Clause 467 of the Income Tax Bi...
    Act RulesBills
    Penalty Provisions for deterrence against non-cooperation with tax authorities : Clause 466 of Incom...
    Act RulesBills
    Procedural Defaults and Penalties in Indian Tax Law : Clause 465 of the Income Tax Bill, 2025 Vs. Se...
    Act RulesBills
    Ensuring Compliance Among Tax-Exempt Entities : Clause 464 of the Income Tax Bill, 2025 Vs. Section ...
    Act RulesBills
    Professionals(i.e. Accountant, Marchant Banker, Registered Valuer) Accountability under Indian Incom...
    Act RulesBills
    Enforcement of Information Disclosure in Cross-Border Transactions : Clause 462 of the Income Tax Bi...
    Act RulesBills
    Penalty Provisions for Non-Filing and Incorrect Filing of TDS/TCS Statements : Clause 461 of the Inc...
    Act RulesBills
    Enforcement of Reporting Obligations by a non-resident having liaison office : Clause 460 of Income ...
    Act RulesBills
    Penalties for Reporting Non-Compliance by Resident constituent entity of an international group unde...
    Act RulesBills
    Legal Implications of Non-Compliance with Reporting Requirements : Clause 458 of the Income Tax Bill...
    Act RulesBills
    Strengthening Transfer Pricing Enforcement : Clause 457 of the Income Tax Bill, 2025 Vs. Section 271...
    Act RulesBills
    Compliance and Penalty Mechanisms for Investment Funds under Indian Tax Law : Clause 456 of the Inco...
    Act RulesBills
    Penalties for Inaccurate Financial Reporting under Indian Income Tax Law : Clause 455 of the Income ...
    Act RulesBills
    Penalties for Non-Compliance in Financial Transaction Reporting : Clause 454 of the Income Tax Bill,...
    Act RulesBills
    Penalty Provisions for Non-compliant Loan Repayments in India's Income Tax Law : Clause 453 of the I...
    Act RulesBills
    Mandatory Electronic Payments and Penalty Regimes : Clause 452 of the Income Tax Bill, 2025 Vs. Sect...
    Act RulesBills
    Evolving Penalty Regimes for Monetary Transaction Violations : Clause 451 of the Income Tax Bill, 20...
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Act RulesBills
    Doctrine of Reasonable Cause in Tax Penalties : Clause 470 of the Income Tax Bill, 2025 Vs. Section ...
    Show AI Summary
    Reasonable cause defense protects taxpayers from penalties for bona fide, non culpable defaults and encourages documented compliance.
    Clause 470 creates an exception to specified penalty provisions: no penalty shall be imposed if the assessee proves there was reasonable cause for the failure. It functions as a non obstante provision covering enumerated sections, shifts the burden of proof to the taxpayer, and is aimed primarily at bona fide procedural or technical lapses rather than deliberate violations.
    Act RulesBills
    Voluntary Disclosure and Penalty Waiver under Indian Tax Law : Clause 469 of the Income Tax Bill, 20...
    Show AI Summary
    Voluntary disclosure and penalty waiver enable administrative relief when pre detection disclosure, cooperation and payment conditions are met.
    Clause 469 empowers the Principal Commissioner or Commissioner to reduce or waive penalties under section 439 where a taxpayer has made a full and true voluntary disclosure before detection, cooperated in assessment and paid or arranged payment of tax or interest; it includes a deeming rule for full disclosure, prior approval safeguards for high value cases, a bar on multiple reliefs, a genuine hardship route with recorded reasons, a twelve month disposal limit, opportunity to be heard, and finality of orders.
    Act RulesBills
    Penalties for Non-Compliance with TDCAN/TAN Requirements : Clause 468 of the Income Tax Bill, 2025 V...
    Show AI Summary
    Penalty for failure to quote TDCAN/TAN: discretionary fixed sanctions apply for non compliance and knowingly false quoting.
    Clause 468 empowers the Assessing Officer to impose a fixed monetary penalty for failure to comply with Section 397 and for quoting a false Tax Deduction and Collection Account Number in prescribed documents where the person knows or believes it to be false, making the penalty discretionary and imposing a mens rea requirement for false quoting while not expressly providing for a statutory opportunity of being heard.
    Act RulesBills
    Penalty Provision for PAN/Aadhaar Non-Compliance in Indian Tax Law : Clause 467 of the Income Tax Bi...
    Show AI Summary
    PAN/Aadhaar compliance: new per-default penalty regime distinguishes intentional false quoting from strict liability omissions and extends responsible person liability.
    Clause 467 establishes a per-default penalty regime for non-compliance with section 262, differentiating intentional false PAN/Aadhaar quoting-which requires proof of knowledge or belief-from omissions treated as strict liability, and extends liability to persons responsible for ensuring correct quoting/authentication; it emphasizes authentication and digital e KYC integration while remaining silent on express procedural safeguards such as the opportunity to be heard, creating potential due process and transitional issues.
    Act RulesBills
    Penalty Provisions for deterrence against non-cooperation with tax authorities : Clause 466 of Incom...
    Show AI Summary
    Penalty for non cooperation: new provision allows senior tax officers to impose a moderate monetary penalty without explicit hearing safeguards.
    Clause 466 empowers specified senior tax officers to impose a moderate monetary penalty for failure to comply with section 254, mirroring prior penalty structure in authority and capped quantum but omitting express procedural safeguards such as an opportunity of being heard, defences like reasonable cause, and a requirement to record reasons, thereby raising concerns about procedural fairness and consistency in imposition.
    Act RulesBills
    Procedural Defaults and Penalties in Indian Tax Law : Clause 465 of the Income Tax Bill, 2025 Vs. Se...
    Show AI Summary
    Penalty for procedural defaults: fixed and daily fines, capped to tax collectible, with delegated authority to impose them.
    Clause 465 creates a penalty regime for procedural non compliance under the Income Tax Bill, 2025: a fixed penalty for discrete defaults, a daily penalty for continuing defaults, a cap tying certain penalties to the amount of tax deductible or collectible, and specified authorities empowered to impose penalties; it broadens the definition of income tax authority and updates cross references to the restructured Bill, while notably omitting an explicit provision requiring an opportunity to be heard before penalty imposition.
    Act RulesBills
    Ensuring Compliance Among Tax-Exempt Entities : Clause 464 of the Income Tax Bill, 2025 Vs. Section ...
    Show AI Summary
    Penalty regime for failure to furnish prescribed statements strengthens compliance under tax exempt reporting obligations.
    A statutory penalty regime targets failure by specified research institutions and charitable funds to furnish prescribed documents, statements, or certificates within prescribed timeframes; penalties fall within a prescribed band and are imposed at the discretion of the Assessing Officer, operating as a civil compliance measure alongside general procedural safeguards and requiring stakeholders to update compliance processes to align with re referenced substantive sections.
    Act RulesBills
    Professionals(i.e. Accountant, Marchant Banker, Registered Valuer) Accountability under Indian Incom...
    Show AI Summary
    Professional accountability: penalty for furnishing incorrect information in professional reports or certificates under the new income tax bill.
    Clause 463 imposes a strict-liability penalty regime on accountants, merchant bankers and registered valuers for furnishing incorrect information in any report or certificate under the Act or rules. It prescribes a fixed per-instance monetary penalty and empowers the Assessing Officer, Joint Commissioner (Appeals) or Commissioner (Appeals) to impose the penalty upon satisfaction that incorrect information was furnished. The clause updates definitional references for valuers, omits an explicit definition of "accountant," and operates without prejudice to other civil or criminal consequences.
    Act RulesBills
    Enforcement of Information Disclosure in Cross-Border Transactions : Clause 462 of the Income Tax Bi...
    Show AI Summary
    Penalty for failure to furnish information: fixed sanction for inaccurate or missing cross-border disclosure, raising proportionality concerns.
    Clause 462 penalises any person required to furnish information under section 397(3)(d) who fails to supply such information or furnishes inaccurate information; the Assessing Officer may impose a fixed monetary penalty, the provision mirrors Section 271I in structure and intent, lacks an express reasonable-cause defence or gradation of penalty, and raises interpretative issues as to the scope of "inaccurate information," procedural safeguards, and proportionality in enforcement.
    Act RulesBills
    Penalty Provisions for Non-Filing and Incorrect Filing of TDS/TCS Statements : Clause 461 of the Inc...
    Show AI Summary
    Penalty for failure to furnish statements: discretionary fines with short grace period where tax is paid and statement filed promptly.
    Clause 461 creates a penalty for failure to deliver statements under section 397(3)(b) or for furnishing incorrect information, authorising the Assessing Officer to impose a discretionary monetary penalty equivalent in range to the existing Section 271H. Clause 461(2) exempts penalty where tax, fee and interest are paid to the Central Government and the statement is filed within a short grace period, thereby balancing deterrence with relief for prompt substantive compliance while leaving procedural safeguards and definitions, such as "incorrect information," unclearly specified.
    Act RulesBills
    Enforcement of Reporting Obligations by a non-resident having liaison office : Clause 460 of Income ...
    Show AI Summary
    Penalty for failure to submit statements may be imposed by the assessing officer as a daily or capped sanction, discretion preserved.
    Clause 460 permits the Assessing Officer to impose discretionary monetary penalties on any person required to furnish a statement under section 505 for failure to file within the prescribed period, using a two-tier structure of a daily sanction for short-term delay and a capped penalty for longer default, with applicability dependent on the scope of the parent reporting obligation and subject to the general procedural and appellate framework of the tax law.
    Act RulesBills
    Penalties for Reporting Non-Compliance by Resident constituent entity of an international group unde...
    Show AI Summary
    Reporting penalties: new clause preserves escalating daily fines and a large fixed penalty for inaccurate international tax reports.
    Clause 459 establishes a tiered penalty regime under section 511 for reporting entities: daily penalties for failure to furnish reports, daily penalties for failure to produce information after the allowed period, an escalated daily penalty if default continues after service of a penalty order, and a substantial fixed penalty for furnishing inaccurate information or failing to correct known or discovered inaccuracies. The prescribed authority under section 511 is empowered to impose these penalties, and the clause mirrors Section 271GB in quantum and triggers while raising issues about reasonable cause relief and procedural safeguards.
    Act RulesBills
    Legal Implications of Non-Compliance with Reporting Requirements : Clause 458 of the Income Tax Bill...
    Show AI Summary
    Penalty for failure to report transfers of management or control triggers significant compliance and enforcement consequences.
    Clause 458 creates a penalty for failure by an Indian concern to furnish information or documents under section 506, authorising the prescribed income-tax authority to impose either a transaction-value-based penalty where a transaction effects a direct or indirect transfer of management or control, or a fixed monetary penalty otherwise, and otherwise mirrors the substantive framework and enforcement objectives of Section 271GA of the Income-tax Act, 1961.
    Act RulesBills
    Strengthening Transfer Pricing Enforcement : Clause 457 of the Income Tax Bill, 2025 Vs. Section 271...
    Show AI Summary
    Transfer pricing documentation penalty: failure to furnish documents leads to transaction value based penalties and enforcement by tax authorities.
    Failure to furnish prescribed transfer pricing information or documentation for international or specified domestic transactions triggers a transaction value based penalty under Clause 457, enforceable by the Assessing Officer, authorised Transfer Pricing Officer and the Commissioner (Appeals); the clause ties this enforcement directly to the obligations in section 171(2) and raises interpretive issues concerning the meaning of failure, computation of transaction value, overlap with other penalties, and the availability of a reasonable cause defence.
    Act RulesBills
    Compliance and Penalty Mechanisms for Investment Funds under Indian Tax Law : Clause 456 of the Inco...
    Show AI Summary
    Penalty for failure to furnish statements: eligible investment funds face a fixed sanction under the bill; authority may impose it.
    Clause 456 imposes a fixed penalty where an eligible investment fund fails to furnish required statements or information within the prescribed time; the prescribed income-tax authority may direct payment of the fixed sanction. The reporting deadline is set by the substantive eligibility reporting provision; the penalty is discretionary rather than automatic, lacks a graded scale, and does not expressly specify procedural safeguards such as criteria for discretion or an opportunity to be heard.
    Act RulesBills
    Penalties for Inaccurate Financial Reporting under Indian Income Tax Law : Clause 455 of the Income ...
    Show AI Summary
    Penalty for inaccurate financial reporting imposes institutional and account-holder liability while enabling recovery of penalties from account holders.
    Clause 455 mandates penalties for persons required to furnish statements of financial transactions or reportable accounts for providing inaccurate information or failing to meet due diligence obligations, and imposes an additional per-account penalty on reporting financial institutions where inaccuracies stem from account-holder-supplied false information; reporting institutions may recover such additional penalties from the responsible account holders by direct recovery or retention of funds, with imposition directed by the prescribed income-tax authority and substantive continuity with the former Section 271FAA.
    Act RulesBills
    Penalties for Non-Compliance in Financial Transaction Reporting : Clause 454 of the Income Tax Bill,...
    Show AI Summary
    Penalty for failure to furnish financial transaction statements - escalating daily sanctions for continued non-compliance after notice.
    Clause 454 creates a statutory penalty regime for failure to furnish a statement of financial transaction or reportable account, prescribing a daily penalty accruing from the date the filing deadline lapses, with an escalated daily rate where default continues after a formal notice, and vesting discretionary imposition authority in the income-tax authority subject to procedural safeguards and rights to challenge.
    Act RulesBills
    Penalty Provisions for Non-compliant Loan Repayments in India's Income Tax Law : Clause 453 of the I...
    Show AI Summary
    Penalty for non-compliant loan repayments: Assessing Officer may impose a penalty equal to the amount repaid for procedural breaches.
    Clause 453 permits the Assessing Officer to impose a penalty equal to any loan, deposit or specified advance repaid in contravention of section 188, applying to all persons and covering repayments made by non-transparent modes. The provision creates strict liability based on procedural breach rather than mens rea, centralizes enforcement with the Assessing Officer, and omits an explicit reasonable-cause defence, raising potential interpretative and transitional issues regarding the scope of specified advances and procedural safeguards.
    Act RulesBills
    Mandatory Electronic Payments and Penalty Regimes : Clause 452 of the Income Tax Bill, 2025 Vs. Sect...
    Show AI Summary
    Electronic payment mandate triggers daily penalties for non compliance unless a taxpayer proves good and sufficient reason.
    Clause 452 empowers the Assessing Officer to impose a fixed per day monetary penalty for failure to provide prescribed electronic modes of payment under section 187, subject to a saving where the person proves good and sufficient reason for the failure; the provision mirrors the former section 271DB framework but streamlines authority and lacks detailed procedural guidance.
    Act RulesBills
    Evolving Penalty Regimes for Monetary Transaction Violations : Clause 451 of the Income Tax Bill, 20...
    Show AI Summary
    Monetary transaction penalty: discretion to impose a penalty equal to prohibited receipt unless good and sufficient reasons are proved.
    Clause 451 empowers the Assessing Officer to impose a penalty equal to the sum received in contravention of section 186 unless the recipient proves good and sufficient reasons; the provision emphasises proportionality, vests discretion in enforcement, omits explicit procedural safeguards and mens rea, and mirrors the substantive penalty quantum and defence in the earlier statutory regime while differing in statutory tone and procedural concision.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Bills › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Bills

      Structured mechanism for treatment of losses from specified businesses in Clause 114 of the Income Tax Bill, 2025 Vs. Comparison with Section 73A of the Income-tax Act, 1961

      10 April, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      Clause 114 Set off and carry forward of losses from specified business.

      Income Tax Bill, 2025

      Introduction

      Clause 114 of the Income Tax Bill, 2025, and Section 73A of the Income-tax Act, 1961, both address the treatment of losses from specified businesses. These statutory provisions are crucial for taxpayers engaged in certain business activities, as they determine how losses can be offset against profits and carried forward to future tax years. Understanding the nuances of these provisions is essential for legal practitioners and taxpayers alike, as they impact tax planning and compliance. Clause 114 is a proposed update in the Income Tax Bill, 2025, aiming to refine the rules regarding the set-off and carry forward of losses from specified businesses. Section 73A, on the other hand, has been part of the Indian tax landscape since its insertion by the Finance (No. 2) Act, 2009, effective from April 1, 2010. This commentary explores the objectives, implications, and practical applications of these provisions, highlighting the differences and similarities between them.

      Objective and Purpose

      The primary objective of both Clause 114 and Section 73A is to provide a structured mechanism for the treatment of losses incurred in specified businesses. These provisions ensure that losses from such businesses are not indiscriminately set off against profits from other sources, thereby maintaining a level of integrity in tax calculations and preventing potential revenue loss to the government. Clause 114 aims to align with contemporary business practices and economic realities by updating the framework for loss set-off and carry forward. It seeks to provide clarity and consistency in the treatment of specified business losses, ensuring that taxpayers engaged in these businesses can plan their tax obligations with certainty. Section 73A was introduced to address similar concerns, providing a clear framework for the treatment of losses from specified businesses u/s 35AD of the Income-tax Act, 1961. This section was designed to promote investment in certain sectors by offering tax incentives, while also ensuring that the benefits are applied consistently across taxpayers.

      Detailed Analysis

      Clause 114 of the Income Tax Bill, 2025

      1. Set-off of Losses:- Clause 114(1) stipulates that any loss computed from a specified business during a tax year can only be set off against profits and gains from another specified business in the same tax year. This provision restricts the set-off to within the same category of business, preventing cross-category adjustments.

      2. Carry Forward of Unabsorbed Losses:- Unabsorbed losses from specified businesses can be carried forward to subsequent tax years. These losses can only be set off against profits from specified businesses in future years. This ensures continuity in the treatment of losses and allows businesses to utilize losses over time.

      3. Definitions:- Clause 114(3) defines key terms such as "specified business" and "unabsorbed loss from the specified business." The definition of "specified business" refers to activities listed in Section 46, while "unabsorbed loss" refers to losses not fully set off in the current tax year.

      Section 73A of the Income-tax Act, 1961

      1. Set-off of Losses:- Similar to Clause 114, Section 73A(1) states that losses from specified businesses can only be set off against profits from other specified businesses. This maintains the integrity of tax calculations by restricting set-offs within the same business category.

      2. Carry Forward of Unabsorbed Losses:- Section 73A(2) allows for the carry forward of unabsorbed losses to future assessment years. These losses can be set off against profits from specified businesses in subsequent years, with provisions for further carry forward if necessary.

      3. Reference to Section 35AD:- Section 73A specifically refers to specified businesses u/s 35AD, which includes capital-intensive sectors like infrastructure, cold chain facilities, and warehousing for agricultural produce. This linkage emphasizes the intention to promote investment in these sectors through targeted tax incentives.

      Practical Implications

      The provisions in both Clause 114 and Section 73A have significant implications for businesses engaged in specified activities. By restricting the set-off of losses to within the same category of business, these provisions prevent the erosion of tax bases through cross-business adjustments.

      This ensures that tax incentives are applied consistently and transparently. For taxpayers, understanding these provisions is crucial for effective tax planning. Businesses must maintain accurate records of profits and losses for each specified business, ensuring compliance with the set-off and carry forward rules. Failure to adhere to these rules can result in penalties and increased tax liabilities.

      Comparative Analysis

      While Clause 114 and Section 73A share similar objectives and structures, there are notable differences:

      1. Scope of Specified Business:- Clause 114 refers to "specified business" as defined in Section 46 of the Income Tax Bill, 2025, whereas Section 73A refers to businesses u/s 35AD of the Income-tax Act, 1961. This difference in scope may lead to variations in the businesses covered under each provision.

      2. Legislative Context:- Clause 114 is part of a broader effort to update and streamline the Income Tax Act, reflecting changes in the economic and business landscape. Section 73A, however, was introduced as part of specific tax incentives for capital-intensive sectors.

      3. Potential for Future Amendments:- As a proposed bill, Clause 114 may undergo changes during the legislative process, potentially altering its provisions or scope. Section 73A, being an established part of the Income-tax Act, 1961, is more stable but may still be subject to amendments through Finance Acts.

      Conclusion

      Clause 114 of the Income Tax Bill, 2025, and Section 73A of the Income-tax Act, 1961, play vital roles in the tax treatment of specified business losses. By providing clear rules for the set-off and carry forward of these losses, they ensure the consistent application of tax incentives and prevent revenue loss through indiscriminate adjustments. While both provisions share similar objectives, the differences in scope and legislative context highlight the need for careful analysis and understanding by taxpayers and legal practitioners. As the Income Tax Bill, 2025, progresses through the legislative process, stakeholders should remain vigilant for potential changes that may impact the application of Clause 114.

      Full Text:

      Clause 114 Set off and carry forward of losses from specified business.

      Topics

      ActsIncome Tax
      Next ➔