Legal Insights into carry forward and set off of losses under the head 'Capital gains' : Clause 111 of the Income Tax Bill, 2025 Vs. Section 74 of the Income Tax Act, 1961

Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.

Clause 111 and Section 74 permit carry forward and set off of unabsorbed capital losses, distinguishing long-term losses (set off only against long-term capital gains) from short-term losses (set off against any capital gains), and both limit carry forward to an eight-year period measured from the year the loss was computed; Clause 111 uses the term 'tax year' and cross-references related provisions in the new Bill while Section 74 refers to 'assessment year.'