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
    Ensuring Procedural Fairness in GST Registration Cancellation: Analysis of a High Court Ruling
    Case LawsService Tax
    The Intersection of International Business and Service Tax: The Export of Services Under Indian Serv...
    Case LawsIncome Tax
    Jurisdictional Challenges in Tax Assessments: Insights from a Recent ITAT Decision
    Case LawsIncome Tax
    High Court Rules on the Invalidity of Reassessment Notices Issued to a Deceased Person
    From Denial to Grant: A Legal Examination of Bail in Money Laundering Allegations
    GST Registration Cancellation and the Rule of Law: Insights from a Key Bombay High Court Judgment
    Case LawsCentral Excise
    Excise Duty Valuation and Limitation Period Extension: A Legal Analysis of the Supreme Court Judgmen...
    Interpreting Limitation and Acknowledgment of Debt under the IBC: A Detailed Legal Analysis
    Case LawsIncome Tax
    Long-Term Capital Gains and Unexplained Cash Credits in Stock Transactions: A Legal Perspective
    Case LawsIncome Tax
    Judicial Approach in Transfer Pricing and PE Attribution: Analysis of a Landmark Case: Legal Perspec...
    Case LawsIncome Tax
    Scrutinizing the Application of Mind in Tax Assessments: Examining the Role of ACIT while granting a...
    Case LawsIncome Tax
    TDS Obligations and DTAA: Clarifying Tax Jurisdiction in International Telecom Services
    Judicial Scrutiny of Arrest Powers under GST Legislation: Balancing Individual Rights and Statutory ...
    Navigating the Legal Maze: Electricity Dues vs. Insolvency Proceedings
    Case LawsIncome Tax
    Distinction Between Business Income and Deemed Income in Income Tax Assessments: Higher rate of tax ...
    Case LawsCustoms
    From Valuation to Penalty and redemption fine: Legal Implications of Importing Restricted Goods in C...
    Case LawsService Tax
    Analyzing the Implications of Delay in Tax Adjudication: A Case Study
    Case LawsCorporate Laws
    Secured Creditors and Asset Disposal in Liquidation: High Court's Balancing Act
    Case LawsIncome Tax
    Analysis of ITAT's Decision on Surplus Stock Taxation
    Contractual Compliance and GST Reimbursement: Unpacking a Landmark Judgment"
❯❯
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
    Procedural fairness in GST registration: specific, detailed show cause notices are required to protect taxpayer hearing rights.
    Cancellation of GST registration requires adherence to procedural fairness, with show cause notices containing precise and detailed allegations so a taxpayer can mount an effective defence; technical portal limitations do not excuse failures to particularise allegations and authorities should issue a fresh detailed notice where the initial notice is defective.
    Case LawsService Tax
    Show AI Summary
    Export of service: services benefiting a foreign recipient's overseas business can qualify as exports, affecting service tax liability.
    Whether commissions earned by an Indian sub agent for procuring orders for a foreign principal qualify as export of service under the Export of Service Rules 2005 depends on the destination based consumption tax concept: the place where benefit accrues and the location of the service recipient determine export character, and services benefiting a foreign recipient's overseas business that meet the Rules' conditions are treated as exports and outside domestic service tax.
    Case LawsIncome Tax
    Show AI Summary
    Jurisdictional validity of tax notice: lack of proper jurisdiction can vitiate assessment proceedings and nullify further action.
    The dominant operative point is that a valid scrutiny assessment under Section 143(2) requires issuance by an officer with lawful jurisdiction determined by income thresholds and administrative instructions; failure in jurisdictional competence can render the notice and ensuing assessment proceedings invalid. Procedural fairness-specifically the opportunity to be heard-is a corollary concern, and while issues regarding additions under Section 69A and the tax effect of Section 115BBE are raised, they become academic if the initiation itself is found jurisdictionally flawed.
    Case LawsIncome Tax
    Show AI Summary
    Validity of reassessment notices: notices issued to a deceased person are void and must be directed to the correct legal entity.
    The High Court held that reassessment notices issued in the name of a deceased assessee are null and void, constituting substantive illegality when directed to a non-existent person; the court emphasized that the correct legal entity must be addressed, that the legal heir's communications and filings were material, and that procedural protections and statutory reopening procedures cannot be bypassed due to administrative or IT constraints.
    Case LawsPMLA
    Show AI Summary
    Bail in money laundering cases-personal liberty and pretrial custody can outweigh investigatory severity when trial is pending.
    The dispute examines bail law in money laundering allegations where the High Court denied bail based on the statutory construction of money laundering and the concept of proceeds of crime, treating the accused as central to an alleged conspiracy; by contrast, the higher court emphasised personal liberty, the duration of pretrial custody, the absence of trial commencement, and the accused's non-inclusion as an accused in the prosecuting agency's charge-sheet, applying the principle of bail over continued detention within the statutory bail regime for money laundering.
    Case LawsGST
    Show AI Summary
    Natural justice requires specific show cause particulars and precludes vague retrospective GST registration cancellations.
    The court found the show cause notice to be vague and deficient in particulars, resulting in a breach of natural justice because the taxpayer was not provided relevant material or evidence. It held that retrospective cancellation without specific mention in the notice lacked legal support and stressed that administrative authorities must avoid arbitrary action, provide clear particulars, and adhere to procedural and statutory norms under the GST regime.
    Case LawsCentral Excise
    Show AI Summary
    Excise duty valuation: inclusion of customer duty benefits affects assessable value; intent determines extended limitation applicability.
    Excise duty valuation focuses on whether benefits from transferred advance licences are includable in the transaction value for assessable value, assessed against statutory value principles and precedent. The extended limitation regime requires proof of deliberate evasion-fraud, collusion, willful misstatement, or suppression-and the Court distinguishes honest legal interpretation from intentional suppression, emphasising mens rea and conduct when applying the extended period to valuation disputes.
    Case LawsIBC
    Show AI Summary
    Acknowledgment of debt in corporate records can extend limitation, enabling insolvency petitions after prior procedural stays.
    The tribunal addressed whether acknowledgments in financial statements and corporate conduct extend the limitation period under the Limitation Act for insolvency petitions, factoring in statutory exclusion of time spent under prior SICA proceedings. It held that a holistic appraisal of balance sheet entries, director's reports and the debtor's conduct can constitute an implicit acknowledgment of debt within the limitation period, thereby operating to extend time for filing an insolvency application.
    Case LawsIncome Tax
    Show AI Summary
    Long-term capital gains preserved where transaction records establish genuineness; mere broker misconduct is insufficient evidence.
    The issue is whether gains from sale of low-priced shares are long-term capital gains or unexplained cash credits under Section 68. The authorities suspected accommodation entries via a broker with a tainted history, but transaction documents-bills, bank payments and contract notes-were held to establish genuineness. Mere suspicion of broker misconduct was deemed insufficient without direct evidence linking the assessee to contrived entries; evidentiary standards and fair hearing obligations were decisive.
    Case LawsIncome Tax
    Show AI Summary
    Permanent establishment attribution: precedent-driven analysis limits taxable profit allocation to where core value is created in digital services.
    The principal issue is attribution of profits to a Permanent Establishment for cross-border digital reservation services, requiring a fact-sensitive analysis of where core business activities and value creation occur; judicial reasoning relied on materially similar precedent to determine the appropriate share of revenue attributable to the PE, stressing that a mere business connection or digital presence does not automatically justify full profit allocation to the jurisdiction and that clear tracing of value creation is essential to avoid double taxation.
    Case LawsIncome Tax
    Show AI Summary
    Application of mind in tax approvals: inadequate ACIT scrutiny under Section 153D can invalidate assessments.
    The core issue is whether the ACIT, when granting approval under Section 153D, performed a genuine application of mind by scrutinising assessment records and search material; the Tribunal and High Court found the approval lacked adequate examination, leading to inconsistencies between additions made by the assessing officer and the assessed income, and rendering the assessment unreliable. The matter was treated as factual rather than presenting a substantial question of law.
    Case LawsIncome Tax
    Show AI Summary
    Royalty characterisation: cross-border telecom payments not taxable as royalty, limiting TDS and extraterritorial jurisdiction.
    Payments by an Indian telecom operator to non-resident carriers for interconnectivity and capacity transfers are not to be characterised as royalty under the applicable DTAA and therefore do not attract TDS; DTAA interpretation governs characterization, Indian jurisdiction is limited over extra territorial income where the foreign entities lack a taxable presence, and retrospective amendments do not impose tax on past transactions compliant with the law at the time.
    Case LawsGST
    Show AI Summary
    Duty to comply with GST summons: noncompliance can permit statutory enforcement while safeguards against arbitrary arrest remain.
    The Supreme Court held that individuals summoned under the GST regime have an enforceable duty to comply with lawful summons; non compliance may trigger statutory enforcement, including arrest where prescribed conditions are met. The Court limited judicial interference in administrative enforcement, underscoring that arrest powers under the CGST Act must be exercised within statutory conditions and subject to safeguards against arbitrary action, while permitting authorities to proceed if respondents fail to comply after a final opportunity.
    Case LawsIBC
    Show AI Summary
    Priority of electricity dues questioned as insolvency rules may alter creditor ranking during corporate liquidation.
    The central issue is whether electricity dues constitute a security interest that makes the supplier a secured creditor with a first charge on assets, or whether such dues are operational/governmental claims subordinated by the IBC waterfall; this turns on registration and formal requirements for security interests and on reconciling the Electricity Act's recovery regime with the IBC's overriding, comprehensive insolvency priority scheme.
    Case LawsIncome Tax
    Show AI Summary
    Deemed income classification denied where surrendered receipts are linked to business activities, avoiding higher tax rate.
    Where surrendered cash, advances and stock discrepancies identified in a survey are linked to ordinary business activities and the assessee supplies specific explanations of source and nexus, the deeming provisions for unexplained investments and unrecorded ownership do not automatically apply; accordingly the higher-rate taxation applicable to incomes classified as deemed income is inapplicable and the amounts are treated as business income for tax purposes.
    Case LawsCustoms
    Show AI Summary
    Redemption fine reduction for restricted imports emphasises proportionality in customs penalty and valuation disputes practice.
    Valuation of imported used multifunction machines was reassessed by a Chartered Engineer, supporting an enhanced customs value while prompting scrutiny of their classification as restricted and the legal basis for detention. The Tribunal evaluated confiscation limits and applied proportionality in monetary sanctions, reducing the imposed penalty and redemption fine to specified proportions of the enhanced value, thereby illustrating judicial discretion in balancing enforcement with fairness in customs adjudication.
    Case LawsService Tax
    Show AI Summary
    Delay in tax adjudication undermines statutory timeframe and can violate principles of natural justice, affecting taxpayers' rights.
    Inordinate delay in adjudicating a service tax show cause notice raised whether such delay contravened the statutory timeframe under Section 73 and violated principles of natural justice; the delay of about a decade, despite an early response by the taxpayer, was characterised as inordinate and prejudicial, inconsistent with the statutory aim of prompt determination and established precedents requiring proceedings to conclude within a reasonable period.
    Case LawsCorporate Laws
    Show AI Summary
    Secured creditor priority upheld; asset protection costs initially borne by creditors and rival claims sent to the specialized tribunal for adjudication.
    The court transferred disputes over assets of a company in liquidation to the specialized insolvency tribunal for expedited adjudication, affirmed the priority of secured creditors while permitting other claimants to present possessory or contractual claims before the tribunal, and ordered that interim asset protection expenses be initially borne by secured creditors but remain recoverable as part of their claims.
    Case LawsIncome Tax
    Show AI Summary
    Surplus stock classification: accounting linkage to business determines treatment as business income over unexplained investment.
    Classification of surplus stock found during a section 133A survey depends on its nexus with ordinary trading and documentary accounting. Where excess inventory is recorded in the stock register and credited to partners' capital account, these accounting entries indicate it forms part of regular business stock and support treatment as business income rather than unexplained investment under section 69B, affecting applicability of special tax treatment under section 115BBE.
    Case LawsGST
    Show AI Summary
    GST reimbursement entitlement affirmed for contract wide transactions, requiring payment with statutory interest and retrospective calculation.
    The court construed amended contract clauses to cover GST impact on both direct and indirect transactions, concluding that the implementing agency's cessation of reimbursements and retrospective recoveries breached contractual promises and principles of promissory estoppel and Article 14, giving rise to an entitlement to reimbursement of withheld GST sums with statutory interest and a court directed timeline for calculation and payment.

    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