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
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
    Comparative Analysis of Tax Recovery and Default Provisions : Clause 411 of the Income Tax Bill, 202...
    Streamlining Advance Tax Credit in Indian Tax Legislation : Clause 410 of the Income Tax Bill, 2025 ...
    Analyzing the Deeming Provisions for Advance Tax Default : Clause 409 of the Income Tax Bill, 2025 v...
    Evolution and Implications of Advance Tax Instalment Provisions : Clause 408 of the Income Tax Bill,...
    Assessing Officer's Powers and Taxpayer Rights in Advance Tax : Clause 407 of the Income Tax Bill, 2...
    Reforming Advance Tax Obligations : Clause 406 of the Income Tax Bill, 2025 Vs. Section 210 of the I...
    Comparative Legal Analysis of Advance Tax Computation: Clause 405 of the Income Tax Bill, 2025 vs. S...
    Understanding Advance Tax Thresholds : Clause 404 of the Income Tax Bill, 2025 Vs. Section 208 of th...
    Significant provision governing the liability for the payment of advance tax in India : Clause 403 o...
    Legal and Practical Implications of PAN Non-Compliance : Clause 397(2) of the Income Tax Bill, 2025 ...
    Centralized Processing of Tax Deduction and Collection Statements : Clause 399 of Income Tax Bill, 2...
    Evolution of Tax Deduction and Collection Account Number : Clause 397(1) of the Income Tax Bill, 202...
    Evolution and Implications of TDS/TCS Default Provisions : Clause 398 of the Income Tax Bill, 2025 V...
    Innovations in TDS/TCS Reporting and Compliance : Clause 397(3) of Income Tax Bill, 2025 vs. Section...
    Legislative framework of collection of tax at source (TCS) and issuance of certificates in India : C...
    Navigating the New Landscape of Tax Collection at Source : Clause 394 of the Income Tax Bill, 2025 V...
    Reforming PAN Compliance : Clause 397(2) of the Income Tax Bill, 2025 vs. Section 206AA of the Incom...
    Transforming Tax Reporting and Compliance in India : Clause 397(3) of Income Tax Bill, 2025 Vs. Sect...
    Safeguarding Taxpayers from Double Taxation : Clause 401 of the Income Tax Bill, 2025 Vs. Section 20...
    Correct identification of the "person responsible for payment" : Clause 402(27) of the Income Tax Bi...
❯❯
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
    Act RulesBills
    Show AI Summary
    Tax default and recovery: rules on payment timelines, interest adjustment, waiver procedures, and deferment during appeals.
    Clause 411 sets the conditions for payment of tax on a notice of demand, the deemed default trigger for coercive recovery, and AO powers to shorten payment periods, extend time or allow instalments. It prescribes interest on unpaid demands with adjustment where liabilities change, prevents overlapping interest charges, allows time bound waiver or reduction of interest for hardship with a hearing requirement, permits deferment of default treatment during appeals on conditions, and protects remittance restricted foreign income from being treated as default.
    Act RulesBills
    Show AI Summary
    Advance tax credit ensures payments are applied to the relevant tax year and credited in regular assessment.
    Sums paid or recovered as advance tax, excluding penalty and interest, shall be treated as payment of tax for the income of the tax year in which payable, and credit for such advance tax must be given to the assessee in the regular assessment; the clause covers voluntary payments and recoveries and ties credit to the relevant tax year, while procedural mechanisms, definition of tax year, and treatment on reassessment are left to subordinate rules.
    Act RulesBills
    Show AI Summary
    Advance tax default: three independent triggers establish deemed default and activate statutory consequences for noncompliance.
    Clause 409 deems a taxpayer in default for advance tax where the taxpayer fails to: pay an instalment specified by an Assessing Officer by the due date; send an intimation of revised liability to the Assessing Officer by the date an unpaid instalment becomes due; or pay advance tax based on the taxpayer's own estimate of current income. The clause frames these three independent triggers as grounds for deeming default, thereby activating statutory consequences such as interest, penalties, and recovery measures.
    Act RulesBills
    Show AI Summary
    Advance tax instalment schedule: staged payments and a single-instalment rule for presumptive taxpayers streamline compliance and revenue flow.
    Clause 408 requires assessees to pay advance tax in staged instalments during the tax year, with progressive minimum thresholds and specified due dates, and treats amounts paid on or before the last day of the tax year as advance tax. It provides a single-instalment exception for presumptive taxpayers and cross-references the statutory computation provision for determining current income, while updating terminology and certain cross-references that will require harmonisation with other provisions.
    Act RulesBills
    Show AI Summary
    Advance tax orders: AO may require payment based on the higher of assessed or returned income, with taxpayer estimation rights.
    Clause 407 authorises the Assessing Officer to order advance tax from persons already assessed, specifying a specified sum-the higher of the latest assessed income or subsequently returned income-and an instalment schedule, with such orders and any amendments requiring accompanying notices of demand and adherence to prescribed timing and procedural safeguards.
    Act RulesBills
    Show AI Summary
    Advance tax self assessment: Bill emphasizes taxpayer initiated instalments and mid year revision, shifting reliance onto voluntary compliance.
    Clause 406 requires every person liable to pay advance tax to self assess and remit instalments based on the specified sum, defined as the assessee's estimate of current income, calculated by the cross referenced methodology and paid by statutory due dates; taxpayers may increase or reduce subsequent instalments to accord with revised estimates, while the clause itself does not set out administrative order powers.
    Act RulesBills
    Show AI Summary
    Advance tax computation: formula-based method clarifies net tax after TDS/TCS credits and tightens credit conditions.
    Clause 405 adopts a formulaic computation of advance tax: A = B - C, where B is tax on the "specified sum" and C is TDS/TCS deductible only if the income is included in the specified sum and the deductor/collector has actually credited/paid or received/debited the income post deduction/collection. Net agricultural income is included by reference to assessing officer orders or the assessee's estimate as applicable. The clause modernises drafting and omits the prior HUF specific provision, raising potential gaps.
    Act RulesBills
    Show AI Summary
    Advance tax liability retained; payable during the tax year when computed tax meets the statutory threshold, preserving continuity.
    Clause 404 requires payment of advance tax during the tax year when the amount of tax "as computed under this Part" for that year reaches the statutory threshold, linking liability to the year of income accrual, incorporating deductions, exemptions and set offs in computation, and using the threshold to exclude small liabilities from procedural advance payments.
    Act RulesBills
    Show AI Summary
    Advance tax liability clarified: pay tax on current income during the tax year, with a narrow senior citizen exemption.
    Clause 403 requires payment of advance tax during the tax year on an assessee's current income, defined as the total income chargeable to tax for that tax year, and exempts resident individuals aged sixty or above who have no income under "Profits and gains of business or profession." The provision replaces earlier temporal terms with "tax year" and references mechanisms within "this Part," indicating structural reorganization and necessitating clear definitions and transitional guidance.
    Act RulesBills
    Show AI Summary
    PAN non compliance increases withholding and collection rates and invalidates declarations, expanding PAN obligations to both TDS and TCS.
    Clause 397(2) mandates furnishing and quoting of PAN by deductees and collectees, invalidates certain declarations and applications where PAN is absent, and requires deductors/collectors to apply prescribed higher rates of TDS and TCS in the absence of PAN. The clause covers both TDS and TCS, provides exemptions for specified non resident scenarios and specified payments, caps TDS on certain rent payments at the last month's rent, and emphasizes comprehensive documentation and reporting obligations to enhance traceability and enforcement.
    Act RulesBills
    Show AI Summary
    Centralized processing of withholding statements enables automated determination and intimation of amounts payable or refundable.
    Centralized processing creates an automated, unified mechanism for TDS and TCS statements, including correction statements, requiring rectification of arithmetical errors and apparent incorrect claims, computation of interest and fees on adjusted amounts, adjustment against prior payments, issuance of an intimation within one year from the end of the tax year, and grant of refunds; the Board may establish a centralized processing scheme and must address interpretive gaps such as the undefined scope of "incorrect claim apparent" and the tax year/financial year distinction.
    Act RulesBills
    Show AI Summary
    Tax Deduction and Collection Account Number mandated for deductors and collectors to enhance tracking and reporting under the new bill
    Clause 397(1) requires every person responsible for deducting or collecting tax to apply for and, when allotted, quote a Tax Deduction and Collection Account Number (TDCAN) in all prescribed TDS/TCS documents; it prevents duplication, allows prescribed timelines and forms, and provides targeted exemptions including notified persons and categories cross referenced to other provisions.
    Act RulesBills
    Show AI Summary
    Deemed assessee in default: consolidated TDS/TCS consequences including interest, asset charge, and conditional relief.
    Clause 398 deems persons required to deduct or collect tax who fail to deduct, collect, or remit to be assessee in default, subject to interest, recovery and a statutory charge on assets. A conditional exception applies where the payee has reported and paid the income tax and an accountant's certificate in the prescribed form is furnished; interest is bifurcated between pre-collection and post-collection periods and must be paid before filing the relevant statement. The clause sets a limitation period for default orders and requires satisfaction of good and sufficient reasons before penalties are imposed.
    Act RulesBills
    Show AI Summary
    TDS/TCS reporting modernization: unified mandates for remittance, verified statements, non-resident reporting and six-year corrections.
    Clause 397(3) mandates that every person responsible for deduction or collection, including employers and designated government officers, remit deducted or collected tax to the Central Government within prescribed timelines and furnish verified statements in prescribed forms; it requires the prescribed authority to issue statements to buyers/licensors/lessees, mandates reporting of payments to non-residents irrespective of taxability, recognises a six-year correction window for statement amendments, compels specified financial institutions to file statements for certain payments, and preserves liability where tax collection fails.
    Act RulesBills
    Show AI Summary
    Lower TCS certificates permit reduced collection when taxpayer income justifies it, with mandatory certified issuance and electronic processes.
    Clause 395(3) permits buyers, licensees or lessees to apply to the Assessing Officer for collection of tax at a lower rate where the AO is satisfied that the applicant's total income justifies lower collection; the AO issues a certificate specifying the reduced rate and validity, subject to rules and to cancellation after hearing. Clause 395(4) requires every person deducting or collecting tax to issue a certificate to the deductee or collectee specifying the amount, rate and other prescribed particulars within prescribed timelines, with electronic issuance anticipated.
    Act RulesBills
    Show AI Summary
    Tax collection at source: consolidated TCS framework aligns rates, preserves declaration exemptions and prevents double collection.
    Clause 394 consolidates TCS rules into a table specifying liable collectors, receipt categories, tiered rates and timing (earlier of debit or payment), retains a declaration based exemption for residents using goods for manufacturing/processing/production or power generation with prescribed duplicate filings and reporting, incorporates anti overlap safeguards preventing double collection on remittance and tour package transactions, and adopts existing definitions for forest produce while omitting certain granular definitions and the lower/nil TCS certificate mechanism pending further rulemaking.
    Act RulesBills
    Show AI Summary
    PAN furnishing requirement: higher withholding rates apply where PAN is not provided, with specified carve-outs for non-residents.
    Clause 397(2) requires recipients and payers of amounts subject to TDS/TCS to furnish and quote a valid PAN; failure to do so triggers withholding or collection at enhanced statutory rates, invalidates declarations or applications for lower or nil deduction absent PAN, and mandates PAN disclosure in all transactional documents, while providing specified exemptions for certain non-residents and a cap on TDS for rent in defined cases.
    Act RulesBills
    Show AI Summary
    TDS/TCS reporting obligations expanded: mandatory electronic payment, verified statements, correction window and liability for non-collection.
    Clause 397(3) requires prompt payment of tax deducted or collected to the Central Government and the furnishing of verified statements in prescribed forms and manner. It expands reporting to include payments to non-residents, special procedures for government remittances without challans, and interest payments below thresholds by specified entities. The clause permits correction statements within six years and imposes liability to pay where tax is not collected, while delegating operational details to prescribed authorities and mandating electronic filing and verification.
    Act RulesBills
    Show AI Summary
    Bar against direct demand protects assessees from paying tax already deducted at source, placing recovery obligations on the deductor.
    A statutory bar prevents authorities from calling an assessee to pay tax to the extent tax has been deducted at source: Clause 401 of the 2025 Bill mirrors Section 205 of the 1961 Act by protecting the assessee where tax was actually deducted, limiting liability "to the extent" of deduction and leaving recovery, penalties, and prosecution against the deductor for any non deposit.
    Act RulesBills
    Show AI Summary
    Person responsible for paying: allocation of TDS/TCS duties to payers, principal officers, authorised remitters and government payors.
    Clause 402(27) designates the person responsible for paying for TDS/TCS according to payment type and payer status: employers (and company principal officers) for salaries; payers (and company principal officers) for interest and other chargeable sums; authorised persons for remittances to NRIs; payers for reporting payments to non-residents irrespective of chargeability; and drawing and disbursing officers (or the actual payor) for government payments, with cross-references to FEMA and updated agent definitions.

    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