Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
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
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. 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
    Interpreting "Or": The Disjunctive Mandate for Personal Hearing in Tax Matters
    Case LawsIncome Tax
    Navigating the Registration Process u/s 80G: Insights from the ITAT Ruling
    Case LawsIncome Tax
    Ensuring Fair Proceedings: The Importance of Proper Notice Service in Income Tax Matters
    Demarcating Authority: High Court Clarifies Jurisdictional Limits of GST Officers
    Case LawsIncome Tax
    Unraveling the Royalty Conundrum and DTAA: ITAT's Stance on Marketing and Reservation Fees
    Case LawsIncome Tax
    Royalty or Not? Decoding the Taxability of Marketing and Reservation Contributions under India-USA D...
    Case LawsIncome Tax
    Unraveling the Intricacies: Assessing a Political Party's Claim for Income Tax Exemption
    Case LawsIncome Tax
    Bogus Capital Gains and Accommodation Entries: Unraveling the Penny Stock Scam and Tax Evasion
    Case LawsIncome Tax
    Strict Interpretation of Exemption Provisions: Supreme Court's Ruling on Section 10B(8) of the Incom...
    Case LawsIncome Tax
    Disallowance u/s 14A: Prospective or Retrospective Effect of the Amendment?
    Case LawsIncome Tax
    Navigating the Complexities of "Charitable Purpose" in Income Tax Exemptions
    Case LawsIncome Tax
    Cooperative Banks vs. Primary Agricultural Credit Societies: Implications for Section 80P Deduction
    Case LawsIncome Tax
    Exemption u/s 11: Condonation of Delay in Filing Form 10
    Case LawsIncome Tax
    Interpreting Section 249(4)(b) of the Income Tax Act: When Non-Payment of Advance Tax Cannot Dismiss...
    Case LawsIncome Tax
    Retrospective Amendments and the Doctrine of Vested Rights: A Judicial Perspective
    Case LawsIncome Tax
    Upholding Equality: HC Strikes Down Discriminatory Circular on Charitable Trust Approvals
    Case LawsIncome Tax
    Judicial Review of Income Tax Settlement Commission (ITSC) Orders: Navigating the Boundaries
    Case LawsIncome Tax
    Assessee's Lackadaisical Conduct Leads to Dismissal of Income Tax Appeal
    Case LawsIncome Tax
    Navigating the Faceless Appeal Scheme: Lessons from the Judgement on Delayed Filing and Deduction u/...
    Case LawsIncome Tax
    Unraveling the Maze of Round-Tripping: The Doctrine of "Source of Source" in Share Capital Transacti...
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

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

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsGST
    Show AI Summary
    Personal hearing mandate in tax proceedings: failure to afford hearing requires reconsideration and a reasoned decision.
    Section 75(4) of the UPGST Act mandates that an opportunity for personal hearing be granted either upon a written request by the person chargeable with tax or penalty or whenever an adverse decision is contemplated; the disjunctive word "or" must be given its plain meaning, creating independent triggers for the hearing obligation. The court concluded the authorities failed to comply with this requirement and directed that a personal hearing be afforded and a reasoned order issued thereafter to ensure procedural fairness in tax adjudication.
    Case LawsIncome Tax
    Show AI Summary
    Section 80G registration: provisional approval permits subsequent final registration, with commencement dated from provisional grant.
    The tribunal construed the proviso-based registration mechanism to permit institutions granted provisional approval to apply for final registration, counting the date of commencement of activities from the grant of provisional approval; administrative circulars extending renewal deadlines apply to specified renewal applications and do not curtail the availability of final registration for provisionally approved institutions, while a view excluding applicants who commenced activities prior to provisional approval was considered inconsistent with the proviso scheme.
    Case LawsIncome Tax
    Show AI Summary
    Proper service of notice: portal-only publication cannot substitute direct communication and mandates a fresh hearing.
    Proper service of notice in income tax proceedings is essential to safeguard the right to be heard and facets of natural justice. Placing notices on an electronic portal without direct communication does not, by itself, satisfy statutory methods of service, and cannot be presumed to give the taxpayer effective notice. Where service in terms of the Act and Rules is not shown, affected parties are entitled to a fair opportunity to file replies and be heard, and the tax administration must provide a fresh hearing and issue an independent speaking order after considering the reply.
    Case LawsGST
    Show AI Summary
    Jurisdictional limits of GST officers: no proceedings against assessees assigned to counterpart authority absent cross-empowerment notification.
    The judgement clarifies that appointment and delegation of powers under the Central and State GST regimes are confined to officers appointed under each statute, and that assessees allocated administratively to Central or State authorities may be lawfully proceeded against only by those authorities unless a formal cross-empowerment notification permits otherwise; no general cross-empowerment notification exists except for limited refund purposes.
    Case LawsIncome Tax
    Show AI Summary
    Taxability of marketing contributions: non taxable where receipts are fiduciary and subject to mutuality, not royalty.
    Where receipts from hotels are received with a corresponding obligation to expend them for agreed common purposes and are held in a fiduciary capacity, such marketing contributions, reward program receipts, reservation contributions and central reservation system fees are not consideration for use of intellectual property or fees for technical services and thus do not qualify as royalty or fees for included services under the India-US DTAA, particularly in the absence of a permanent establishment and where coordinate precedent on identical facts supports non taxability under the principle of mutuality.
    Case LawsIncome Tax
    Show AI Summary
    Royalty characterization: marketing and reservation contributions treated as non-royalty under DTAA when tied to agreed-use obligations.
    Whether marketing and reservation contributions from Indian hotels to a US company qualify as Royalty or Fees for Included Services under the India-USA DTAA turns on their substantive nature: the presence of a corresponding contractual obligation to apply funds for agreed marketing, advertising and reservation activities and supporting auditor evidence indicates such receipts are not consideration for making available intellectual property or technical services, distinguishing them from factual scenarios where contributions increase brand value or transfer intangible know how.
    Case LawsIncome Tax
    Show AI Summary
    Section 13A compliance: failure to meet proviso conditions bars political party exemption and informs stay assessment approach.
    A registered political party's claim of exemption under Section 13A was rejected for failure to meet proviso conditions, including receipt of donations in breach of the cash donation prohibition; the tribunal treated non exempt voluntary contributions as income from other sources, disallowing deductions; allegations of mala fides were dismissed due to the party's procedural delays; and the tribunal's prima facie framework for stay applications-assessing merits, undue hardship, and likelihood of success-was upheld, with liberty to apply afresh to the tribunal given changed circumstances.
    Case LawsIncome Tax
    Show AI Summary
    Burden of Proof under section sixty eight: genuineness of share transactions must be established or treated as accommodation entries.
    The dispute concerned alleged bogus long term capital gains from penny stock trading characterised as an accommodation entry; revenue contested genuineness, identity and creditworthiness of parties while assessees relied on expert and market information. Applying the doctrine of preponderance of probabilities, the court reiterated that the initial burden to prove identity and genuineness lies with the assessee, criticised inadequate enquiries by authorities, rejected expert and media reliance as a substitute for due diligence, and described the accommodation entry modus operandi leading to findings that the transactions were not satisfactorily proved.
    Case LawsIncome Tax
    Show AI Summary
    Strict compliance with exemption conditions: declaration and filing deadline mandatory; revised returns cannot introduce new exemption claims.
    The Court held that both conditions for claiming the exemption-furnishing a written declaration to the assessing officer and submitting it before the due date for the original return-are mandatory and must be strictly complied with. It rejected treating the time limit as directory, distinguished deduction-related authorities, and held that a revised return cannot introduce new exemption claims or claim carry-forward benefits not made in the original return.
    Case LawsIncome Tax
    Show AI Summary
    Retrospectivity of tax amendment: amendment held prospective; prior rule barring disallowance where no exempt income applies.
    The court held that the Finance Act amendment described as "for removal of doubts" cannot be given retrospective effect where it alters prior law; the Finance Bill memorandum fixing commencement determined prospectivity, and existing Division Bench precedent that no disallowance can be made if no exempt income was earned was applied, subject to the ultimate outcome of the pending higher court challenge.
    Case LawsIncome Tax
    Show AI Summary
    Charitable purpose clarified: statutory public bodies generally exempt; commercial receipts taxed under quantitative proviso, with annual scrutiny required.
    The judgement narrows the scope of charitable purpose under Section 2(15) by treating statutory public utility bodies as generally exempt while excluding income from commercial activities beyond core regulatory or public-interest functions. Trade-promotion and non-statutory bodies may qualify if charges are nominal, but ancillary fee-generating services and high-fee providers produce taxable commercial receipts. Private trusts' advertisement income is commercial. Assessing authorities must perform yearly scrutiny and apply the proviso's quantitative limits to determine exemption eligibility.
    Case LawsIncome Tax
    Show AI Summary
    Deduction 80P eligibility turns on whether a cooperative society's banking status classifies it as a cooperative bank; AO to verify.
    A cooperative society carrying on deposit-taking and lending, issuing cheques and providing banking services may fall within the banking business definition under the Banking Regulation Act; whether it qualifies as a cooperative bank under that Act-affected by its bye-laws and membership rules-must be determined by fact-specific examination to decide entitlement to the cooperative deduction.
    Case LawsIncome Tax
    Show AI Summary
    Condonation of Delay in Filing Form Ten: reasonable professional oversight accepted, delay condoned and rectification allowed.
    Condonation of delay in filing Form Ten was granted where the auditor's bona fide oversight-reporting accumulation in the audit report (Form Ten B) and misconstruing separate filing requirements-led to a 361 day delay; the court found the lapse inadvertent amid pandemic conditions, accepted the explanation, quashed the refusal order and permitted rectification steps, treating the delay as condoned.
    Case LawsIncome Tax
    Show AI Summary
    Advance tax obligation: absence of taxable income prevents dismissal of appeal for non-payment of advance tax.
    The Tribunal held that the advance tax payment condition for appeal maintainability applies only when the assessee had a legal obligation to compute and pay advance tax; in the absence of taxable income no such obligation exists, and an appeal cannot be dismissed solely for non-payment of advance tax. The Tribunal directed that the matter proceed to merits with an opportunity to be heard, stressing that the payment requirement must be applied in light of factual circumstances.
    Case LawsIncome Tax
    Show AI Summary
    Vested rights preserved against retrospective tax amendments; filings made before enactment remain effective for settlement consideration.
    The court addressed whether a retrospective Finance Act amendment prohibiting settlement applications from a specified date could divest a taxpayer who filed earlier of its vested right to have the application considered. It held that retrospective legislation cannot take away rights already accrued by actions completed before enactment unless clearly intended; that section 119 confers time-extension power but cannot impose new substantive eligibility conditions; and that administrative delay by revenue does not justify denying access where an application was already filed.
    Case LawsIncome Tax
    Show AI Summary
    Reasonable classification principle: differential deadline for charitable trust tax recognition cannot lack rational basis or equality protection.
    A departmental circular extended a filing deadline for tax recognition to mitigate hardship but excluded newly formed charitable trusts without offering reasons; the exclusion lacked an intelligible differentia and rational nexus to the circular's object, making the differential treatment arbitrary and ultra vires the constitutional guarantee of equality, requiring the excluded applications to be treated as within time and decided on merits.
    Case LawsIncome Tax
    Show AI Summary
    ITSC jurisdiction extends beyond application disclosures, while full and true disclosure and narrow judicial review govern settlement oversight.
    The Income Tax Settlement Commission may inquire into and decide issues disclosed in the application and any other matters relating to the case as reflected in the Commissioner's report or uncovered by further inquiry; full and true disclosure is mandatory and amendments or contradictory positions that undermine that requirement are impermissible, yet contesting taxability before the Commission does not automatically negate disclosure; judicial review is limited to statutory contravention, prejudice, fraud, bias or malice, while sufficiency of materials placed before the Commission is generally beyond routine court scrutiny.
    Case LawsIncome Tax
    Show AI Summary
    Delay condonation denied where litigant's evasive conduct and non participation failed to constitute sufficient cause for appeal filing.
    The court refused condonation of delay for filing an appeal where a best judgment assessment treated cash bank deposits as unexplained after the assessee failed to file returns or participate in proceedings; reliance on transition to a faceless e filing regime and lack of alerts was held insufficient, as the assessee's evasive and habitual non participation did not amount to sufficient cause warranting condonation under the applicable doctrine.
    Case LawsIncome Tax
    Show AI Summary
    Sufficient cause for delay in filing appeals rejected where faceless scheme migration did not excuse prolonged inaction.
    The court held that migration to a faceless appeal system did not, without persuasive evidence, constitute sufficient cause to condone a lengthy delay in filing an appeal, finding the explanation reflective of litigant inaction rather than unavoidable impediment. On tax deduction, the court applied authority that a non-obstante clause does not negate the employer's obligation to deposit employees' statutory contributions by the due date as a condition for claiming the deduction, and treated the appeal as meritless and barred by limitation.
    Case LawsIncome Tax
    Show AI Summary
    Source of source doctrine used to pierce the corporate veil where share capital appears round tripped among related entities.
    The assessee must prove identity, genuineness and creditworthiness of investors under section 68; examination extends to the true origin of funds where bank records show circular transfers, related party directorships, lack of business operations, and arbitrary share premium, permitting lifting the corporate veil and application of the source of source doctrine to treat such receipts as not satisfactorily explained.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of Section 113 "Set off and carry forward of losses computed in respect of speculation" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      2 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 113 Set off and carry forward of losses computed in respect of speculation business.

      Income-tax Act, 2025

      At a Glance

      Clause 113 (Old Version) of the Income Tax Bill, 2025 sets out the rules for set-off and carry-forward of losses arising from speculation business. It matters because it prescribes the restriction that such losses are to be absorbed only against profits from speculation business and provides a four-year carry-forward limit, affecting taxpayers engaged in speculative trading (including certain companies trading in shares). Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 113 of the Income Tax Bill, 2025 (Old Version). The provision addresses the treatment of "speculation business" losses for set-off and carry-forward purposes. Definitions and explanatory notes within the text: sub-section (5)(a) contains a deeming provision for companies engaged in purchase and sale of shares of other companies; sub-section (5)(b) defines "unabsorbed speculation business loss."

      Coverage: applies to losses computed in respect of a speculation business carried on by the assessee during a tax year and to companies captured by the deeming provision, subject to carve-outs in sub-section (6).

      Statutory Provision Mode

      Text & Scope

      The clause comprises six sub-sections. Key elements are:

      • Sub-sec (1): Any loss computed from a speculation business carried on by the assessee during any tax year shall be set off only against profits and gains, if any, of another speculation business for that tax year.
      • Sub-sec (2): The "unabsorbed speculation business loss" for any tax year shall be carried forward to the subsequent year and set off only against profits/gains of speculation business in that subsequent year, and iteratively thereafter.
      • Sub-sec (3): Carry-forward is limited to four tax years immediately succeeding the year in which the loss was first computed.
      • Sub-sec (4): The unabsorbed speculation loss shall be allowed to be set off before set-off of any carried forward allowance u/s 33(11) or 45(7).
      • Sub-sec (5)(a): A company whose business partly consists of purchase and sale of shares of other companies shall be deemed to carry on speculation business to that extent; sub-sec (5)(b) defines "unabsorbed speculation business loss."
      • Sub-sec (6): Carve-outs: the deeming in (5)(a) does not apply if the company's gross total income mainly consists of income under "Income from house property", "Capital gains", or "Income from other sources", or if its principal business is trading in shares, banking, or granting loans/advances.

      Interpretation

      The clause expresses a clear legislative intent to ring-fence speculation business losses: they are to be absorbed only against similar profits and are not available for general set-off against other heads of income. The temporal limitation of four years indicates a policy choice to provide limited relief while preventing indefinite carry-forward of speculative losses. The explicit priority rule in sub-sec (4) manifests an interpretive principle that unabsorbed speculation losses should be exhausted before other carried-forward allowances related to speculation business.

      Exceptions/Provisos

      Carve-outs are confined to the deeming provision in sub-sec (5)(a). Where a company's gross total income mainly arises from specified heads, or where its principal business is trading in shares/banking/loans and advances, the deeming to speculation business does not apply. No other exceptions or provisos are stated in the document.

      Illustrations

      • Example 1: A sole proprietor undertakes intraday trading deemed speculation business and incurs a loss of Rs. 10 lakh in Year 1. That loss can be set off only against profits from speculation business in Year 1; any unabsorbed portion is carried forward up to four subsequent years to be set off only against speculation profits. (Numbers and factual posture consistent with clause language.)
      • Example 2: A company A whose primary business is manufacturing but that also buys and sells shares of other companies incurs a speculation loss to the extent of its share trading activity. That loss is an "unabsorbed speculation business loss" and is set off/carried forward per the clause unless the carve-outs in (6) apply. (Specific quantum and sequence follow the clause.)

      Interplay

      The clause expressly interacts with sections 33(11) and 45(7) by prioritising set-off of unabsorbed speculation business loss ahead of carried-forward allowances under those sections. No other statutory rules, notifications, or circulars are mentioned in the text. Any further statutory interplay is Not stated in the document.

      Differences Between the Two Provisions and Practical Impact

      • Terminology: The Act (Section 113) uses the phrase "loss, computed in respect of a speculation business" while the Bill (Clause 113, Old Version) consistently uses "unabsorbed speculation business loss" and defines that term in sub-section (5)(b).
        • Practical impact: The Bill's express definition clarifies the concept of unabsorbed loss for drafting and interpretation; the Act version omits that explicit definition, which may lead to reliance on ordinary meaning or other provisions for interpretive clarity.
      • Sequence and phrasing of carry-forward rule: The Act sets out (1) set-off only against other speculation business profits; (2) carry-forward where loss cannot be wholly set off, with iterative application; (3) four-year limitation. The Bill states these same rules but frames sub-section (2) as carrying forward "unabsorbed speculation business loss" to the subsequent year and repeating.
        • Practical impact: Substantive carry-forward and limitation periods appear the same; the Bill's language is marginally more explicit in naming the unabsorbed loss as the subject of carry-forward, aiding clarity for compliance and assessment.
      • Priority vis-`a-vis other carried forward allowances: The Act (sub-sec (4)) states "effect shall first be given to the provision of this section" where any allowance u/s 33(11) or s.45(7) related to speculation business is to be carried forward. The Bill (sub-sec (4)) states the unabsorbed speculation business loss "shall first be allowed to be set off before allowing set off of any carried forward allowance u/s 33(11) or 45(7)."
        • Practical impact: The Bill more clearly prescribes the order of set-off-explicitly prioritising speculation loss over carried-forward allowances-reducing interpretive dispute about sequencing; the Act's phrasing is similar but less prescriptive in form.
      • Definition deeming companies to carry on speculation business: Both texts have sub-section (5)(a) deeming a company that purchases and sells shares of other companies to be carrying on speculation business to that extent. The Bill places this within a broader sub-section (5) that also contains the definition of "unabsorbed speculation business loss" in (5)(b); the Act has (5) as the deeming clause only.
        • Practical impact: The Bill consolidates definitional material under one sub-section, improving textual structure and user comprehension.
      • Non-application exceptions: Both texts contain identical carve-outs in sub-sec (6) exempting the deeming rule for companies whose gross total income consists mainly of certain heads or whose principal business is trading in shares/banking/loaning.
        • Practical impact: No substantive change here.
      • Stylistic and drafting differences: The Bill uses the phrase "during any tax year" and "for the said tax year" in sub-sec (1), and more repetitive phrasing in sub-sec (2). The Act is more succinct.
        • Practical impact: Drafting style changes in the Bill provide marginally more explicit temporal markers and an express definitional provision, aiding textual clarity but not altering substantive effect.

      Practical Implications

      • Compliance and risk areas: Taxpayers engaged in trading activities must identify whether their activities constitute "speculation business" and compute losses accordingly, because such losses have restricted set-off availability and a limited carry-forward window. Misclassification may lead to disallowance of broader set-off claims. The Bill's express definition of "unabsorbed speculation business loss" reduces interpretive risk when determining carry-forward subjects.
      • Record-keeping/evidence points: Taxpayers should maintain contemporaneous records segregating speculative trading profits/losses from other business incomes, and documents supporting the nature and extent of share trading where companies have mixed businesses, so as to establish the extent to which the deeming clause applies or does not apply under the carve-outs in sub-sec (6). The clause itself does not prescribe forms or specific documentary thresholds. (Procedures/forms: Not stated in the document.)

      Key Takeaways

      • The Bill ring-fences speculation business losses: set-off permitted only against speculation business profits.
      • Unabsorbed speculation business losses can be carried forward for up to four subsequent tax years only.
      • Unabsorbed speculation losses must be set off before carried-forward allowances u/s 33(11) or s.45(7).
      • Companies that purchase and sell shares of other companies are deemed to carry on speculation business to that extent, subject to carve-outs.
      • Carve-outs exclude the deeming rule where gross total income mainly consists of certain heads or where the company's principal business is share trading, banking, or lending.
      • The Bill's drafting provides greater definitional clarity (term "unabsorbed speculation business loss") and sequencing language than the Act version, improving interpretive certainty without altering substantive effect materially.

      Full Text:

      Section 113 Set off and carry forward of losses computed in respect of speculation business.

      Topics

      ActsIncome Tax