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
    NewsBills
    AMENDMENTS IN THE GST (Compensation to States) Act, 2017
    Case LawsIncome Tax
    Court Upholds Deduction for Operational Hotel under Section 35AD Despite Administrative Delays
    Case LawsIncome Tax
    Landmark Ruling: Leasing Businesses Entitled to Depreciation Benefits
    Case LawsIncome Tax
    Court Decision on Convertible Debentures Expenses : Revenue or Capital Expenditure?
    Case LawsIncome Tax
    Judgement on Feasibility Study Costs on Project Development: Revenue or Capital Expenditure?
    Case LawsIncome Tax
    Navigating Section 43B: Supreme Court Decision on Unutilised MODVAT Credit and Sales Tax Recoverable
    Case LawsIncome Tax
    Failure to deduct TDS and Disallowance of expenses: Supreme Court Clarifies Retrospective Applicatio...
    Case LawsIncome Tax
    Deduction of Bad Debts: Supreme Court's Ruling on Section 36 Compliance and alternative claim u/s 37
    Case LawsIncome Tax
    Principal-Agent Relationship in Telecom Sector and TDS u/s 194H: A Supreme Court Verdict
    Case LawsIncome Tax
    Procedural Compliance vs. Substantive Justice: Balancing Procedural Rigidity and Transitional Hardsh...
    Case LawsIBC
    Maximizing Value in Insolvency: NCLAT Upholds CoC's Right to Negotiate Post-Challenge Mechanism
    Case LawsIBC
    Supreme Court Clarifies Limitation Period for Appeals before NCLAT under IBC in the Digital Age: E-...
    Case LawsIncome Tax
    Navigating the Bounds of Tax Law: Supreme Court's Verdict on Section 153-C Assessments
    Case LawsIncome Tax
    The Delhi High Court's Guiding Light on Post-Search Tax Assessments: Application of Section 153C, po...
    Case LawsIncome Tax
    Navigating Legal and Procedural Hurdles: A Charitable Institution's Quest for Tax Exemption and Regi...
    Case LawsIncome Tax
    Supreme Court Clarifies Jurisdictional Objections in Tax Assessments: A Landmark Order
    Case LawsIncome Tax
    Invalid Notices and the Importance of Proper Jurisdiction: Lessons from a High-Profile Tax Case
    Case LawsIncome Tax
    Upholding Precedent: Supreme Court's Stance on Taxation of Cross-Border Software Payments (Royalty)
    Case LawsIncome Tax
    The Cross-Border Software Purchase Conundrum: Supreme Court's Clarification on TDS for Non-Resident...
    Case LawsGST
    Ensuring Justice in GST Registration Cancellations: A Landmark High Court Ruling
❮
❯
❯❯
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
    NewsBills
    AMENDMENTS IN THE GST (Compensation to States) Act, 2017
    Show AI Summary
    Regularisation of cess shortfalls where non levy arose from general practice allows government to sanction corrective levy.
    Section 8A empowers the government to regularize cases of non-levy or short-levy of the compensation cess where such under-collection arose from a prevailing general practice, providing an administrative mechanism to treat practice-driven cess shortfalls as regularizable liabilities under the GST compensation framework.
    Case LawsIncome Tax
    Court Upholds Deduction for Operational Hotel under Section 35AD Despite Administrative Delays
    Show AI Summary
    Deduction eligibility for operational hotels affirmed despite administrative delay in star classification, focusing on substantive compliance.
    The court addressed entitlement to a deduction under Section 35AD(5)(aa) where a hotel began operations and generated income in the relevant year and a timely application for star classification was submitted, but formal certification was delayed due to administrative inspections; the court applied a purposive construction to allow the deduction when substantive operational conditions were satisfied and delay was not the assessee's fault.
    Case LawsIncome Tax
    Landmark Ruling: Leasing Businesses Entitled to Depreciation Benefits
    Show AI Summary
    Depreciation entitlement for leasing companies where contractual ownership and business use are established, allowing higher depreciation rates.
    A lessor retains entitlement to depreciation where lease terms demonstrate exclusive ownership rights, repossession power, return obligations and inspection rights, and where the asset is used in the course of the lessor's leasing business; actual physical use by the lessor is not required. Leasing activity that functionally equates to hiring can qualify assets for an enhanced rate of depreciation despite registration in the lessee's name.
    Case LawsIncome Tax
    Court Decision on Convertible Debentures Expenses : Revenue or Capital Expenditure?
    Show AI Summary
    Revenue classification of debenture issuance expenses upheld as revenue expenditure despite later conversion into equity.
    Expenses incurred to issue convertible debentures that are raised to provide working capital are to be treated as revenue expenditure because classification depends on the purpose and usage of the expenditure, and future conversion into shares does not change its revenue character.
    Case LawsIncome Tax
    Judgement on Feasibility Study Costs on Project Development: Revenue or Capital Expenditure?
    Show AI Summary
    Classification of feasibility study costs: expansion-related studies without new assets qualify as revenue expenditure.
    Whether feasibility study expenditures are revenue or capital depends on purpose and benefit: costs to obtain an enduring benefit or create a new capital asset are capital; costs incurred to expand the same business, under unity of control and without creation of new assets, are revenue in nature.
    Case LawsIncome Tax
    Navigating Section 43B: Supreme Court Decision on Unutilised MODVAT Credit and Sales Tax Recoverable
    Show AI Summary
    Section 43B actual-payment requirement prevents deduction of unutilised MODVAT credit and sales tax recoverable balances.
    Section 43B permits deduction only for sums payable as tax, duty, cess or fee that are actually paid in the relevant previous year (or paid before the return due date where a statutory liability existed). Unutilised MODVAT credit is an entitlement to adjust future excise liabilities and not an actual payment; sales tax in a recoverable account is a cost adjustment, not discharge of statutory liability. Because no excise liability existed at the relevant year end, the proviso does not apply and such credits do not meet the Section 43B payment requirement for deduction.
    Case LawsIncome Tax
    Failure to deduct TDS and Disallowance of expenses: Supreme Court Clarifies Retrospective Applicatio...
    Show AI Summary
    Retrospective application of curative amendment to TDS deadline clarified, affecting disallowance of expenses under the tax provision.
    The Court addressed whether an amendment extending the time to deposit TDS should be applied retrospectively to govern the operation of a statutory disallowance provision. After reviewing prior amendments, explanatory materials, and precedent on curative measures, the Court characterised the later amendment as curative and directed its retrospective application to the date of insertion of the original provision, thereby affecting the applicability of the disallowance to expenses where TDS was deposited by the extended deadline.
    Case LawsIncome Tax
    Deduction of Bad Debts: Supreme Court's Ruling on Section 36 Compliance and alternative claim u/s 37
    Show AI Summary
    Bad debt deduction criteria clarified under Sections 36 and 37 - stricter substantiation required; capital expenditure excluded.
    Entitlement to a bad debt deduction requires statutory compliance and adequate substantiation; an accounting write off alone does not suffice. The assessee's failure to produce coherent documentary evidence of the nature and terms of the advance, inconsistent characterisation of the payment, and the capital nature of the outflow precluded treatment as a business deduction. The general business expenditure provision does not avail items that are within or expressly excluded by the bad debt framework.
    Case LawsIncome Tax
    Principal-Agent Relationship in Telecom Sector and TDS u/s 194H: A Supreme Court Verdict
    Show AI Summary
    Commission characterization: discounts to franchisees are sales margins, not commission; therefore no TDS obligation under Section 194-H.
    The Court held that the characterisation of receipts as commission or brokerage under Section 194-H requires agency relationships established by control, fiduciary obligations and the ability to bind the principal. Franchisees/distributors who buy prepaid products at discounts, bear commercial risk, determine resale margins and lack pricing control operate independently. Their discounted purchase price and resale margin constitute sale proceeds, not commission for services rendered on behalf of the provider, and thus do not fall within Section 194-H's withholding obligation.
    Case LawsIncome Tax
    Procedural Compliance vs. Substantive Justice: Balancing Procedural Rigidity and Transitional Hardsh...
    Show AI Summary
    Procedural timelines for charitable registration may be treated as directory to mitigate transitional electronic filing hardships and enable merit review.
    The tribunal treated administrative timeline extensions and electronic-filing difficulties as relevant to construing statutory deadlines for charitable approval, regarding the contested filing timelines as directory rather than strictly mandatory where substantive compliance existed, and directed merit-based reconsideration instead of dismissal solely for technical delay.
    Case LawsIBC
    Maximizing Value in Insolvency: NCLAT Upholds CoC's Right to Negotiate Post-Challenge Mechanism
    Show AI Summary
    CoC negotiation rights preserved after challenge mechanism, allowing revised proposals to maximize corporate value under insolvency framework.
    The CoC retains authority to negotiate with resolution applicants and to call for revisions to resolution plans post-challenge mechanism to maximize corporate value; Regulation 39(1A) is procedural and does not bar such substantive negotiation, and the conclusion of a challenge mechanism does not vest the highest bidder with an automatic right to approval, leaving the CoC's commercial judgment paramount.
    Case LawsIBC
    Supreme Court Clarifies Limitation Period for Appeals before NCLAT under IBC in the Digital Age: E-...
    Show AI Summary
    Limitation period for IBC appeals runs from e filing date, with time to obtain certified copies excluded.
    The period for filing an appeal under the Insolvency and Bankruptcy Code is to be computed from the date of e filing, with allowance for later submission of a physical copy; time taken to obtain certified copies is excluded from the limitation calculation in line with the Limitation Act, producing a framework harmonising tribunal rules, statutory principles, and technological filing practices.
    Case LawsIncome Tax
    Navigating the Bounds of Tax Law: Supreme Court's Verdict on Section 153-C Assessments
    Show AI Summary
    Incriminating evidence requirement for search-based tax assessments: without it, 153 C assessments fail; reassessment under 147/148 remains possible.
    Assessments under Section 153-C require incriminating material discovered during search and seizure; absent such material, those assessments lack evidentiary foundation and may be set aside, though the Revenue may pursue reassessment under alternate provisions if independent legal grounds exist.
    Case LawsIncome Tax
    The Delhi High Court's Guiding Light on Post-Search Tax Assessments: Application of Section 153C, po...
    Show AI Summary
    Post-search assessment requires reliance on incriminating material discovered during search to validate reassessment of income.
    Post-search assessments must be founded on incriminating material discovered during the search; reassessments cannot be based on material unconnected to search records. Third party assessments require a demonstrable link between the impugned income and the incriminating material within those records. The court reaffirmed precedent distinguishing ordinary reassessment from search triggered reassessment and directed re determination consistent with those legal principles to preserve procedural fairness.
    Case LawsIncome Tax
    Navigating Legal and Procedural Hurdles: A Charitable Institution's Quest for Tax Exemption and Regi...
    Show AI Summary
    Procedural fairness: clarifying timing for final registration under section 80G prevents denial for pre approval activities.
    The tribunal identified procedural deficiencies in the tax authority's handling of a charity's final registration application, finding that a single short-notice hearing failed to secure adequate opportunity to be heard and underscoring procedural fairness. It further clarified that provisional approval is a predicate to applying for final registration and that activities begun prior to provisional approval do not automatically preclude later final registration, rejecting a restrictive timing construction and directing fresh consideration consistent with those legal principles.
    Case LawsIncome Tax
    Supreme Court Clarifies Jurisdictional Objections in Tax Assessments: A Landmark Order
    Show AI Summary
    Jurisdictional objection waiver: assessee's participation after notice bars later challenge, remedial reassessment permitted within timeframe.
    The Supreme Court held that an assessee who participates in assessment proceedings after receiving an assessment-process notice without timely challenging the assessing officer's jurisdiction is barred from later disputing that jurisdiction under the statutory limitation. It set aside the High Court's order and directed the assessing officer to complete the assessment within a short prescribed timeframe, with the proviso that the assessee may not plead limitation in that completion process.
    Case LawsIncome Tax
    Invalid Notices and the Importance of Proper Jurisdiction: Lessons from a High-Profile Tax Case
    Show AI Summary
    Jurisdiction in tax assessments: improper issuing authority can invalidate notices and require reissuance by competent authority.
    Jurisdiction in tax assessments was the pivotal issue: the record showed assessment power lay with the Commissioner of Income Tax (Exemption), not the subordinate officer who issued the contested notice, rendering that notice issued without jurisdiction. The petition also challenged adherence to principles of natural justice. The court refrained from adjudicating the substantive assessment and demand because those aspects were subject to statutory appeal, distinguishing jurisdictional defects from appealable merits and allowing issuance by the competent authority in conformity with procedural safeguards.
    Case LawsIncome Tax
    Upholding Precedent: Supreme Court's Stance on Taxation of Cross-Border Software Payments (Royalty)
    Show AI Summary
    Taxation of cross border software payments as royalty reinforced; precedent remains binding despite pending review, so withholding obligations persist.
    Supreme Court reaffirmed that payments to non residents for software are to be treated as royalty for withholding tax purposes, holding that a pending review against an earlier precedent does not suspend that precedent's application; procedural limits on review under the Code of Civil Procedure prevent indefinite postponement of settled law, requiring taxpayers and payors in cross border software transactions to comply with prevailing withholding obligations.
    Case LawsIncome Tax
    The Cross-Border Software Purchase Conundrum: Supreme Court's Clarification on TDS for Non-Resident...
    Show AI Summary
    Royalty characterisation of cross-border software dictates TDS obligations based on transaction substance and applicable DTAA.
    Whether payments to non-resident suppliers for computer software constitute royalty and attract TDS depends on the transaction's terms and economic substance; payments reflecting a one-time purchase or transfer of goods do not automatically qualify as royalty. Applicable Double Taxation Avoidance Agreement (DTAA) provisions that are more favourable to the taxpayer govern taxability, and withholding obligations arise only if, after applying treaty benefits and examining substance, the payment is chargeable under domestic law or the DTAA.
    Case LawsGST
    Ensuring Justice in GST Registration Cancellations: A Landmark High Court Ruling
    Show AI Summary
    Procedural fairness: administrative cancellation of registration demands reasoned decision-making to uphold equality and due process protections.
    Procedural fairness in administrative GST cancellations is the central concern: cancellation of a proprietorship's GST registration for non-filing of returns raises whether authorities considered exceptional personal and pandemic-related circumstances before terminating registration and whether orders contain adequate, contemporaneous reasons so that affected persons can understand and challenge the basis of the action.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Income Tax › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Income Tax

      Comparison of Section 114 "Set off and carry forward of losses computed in respect of specified business." 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

      Print Options

      Section 114 Set off and carry forward of losses computed in respect of specified business.

      Income-tax Act, 2025

      At a Glance

      Clause 114 of the Income Tax Bill, 2025 (Old Version) prescribes that losses computed from a "specified business" may be set off only against profits and gains of other specified businesses and that any unabsorbed loss may be carried forward and set off solely against future profits of specified businesses. The provision matters to taxpayers carrying on activities classified as specified businesses and to tax administration implementing set-off/carry-forward rules. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 114 interacts with the Income Tax Bill, 2025 and cross-references "specified business" as referred to in section 46. The clause falls under the Part titled "SET OFF, OR CARRY FORWARD AND SET OFF OF LOSSES." The provision governs inter-year treatment of losses arising from businesses designated as "specified business." Definitions provided within the clause (sub-section (3)) include:

      • "specified business" - any specified business referred to in section 46;
      • "unabsorbed loss from the specified business" - any loss computed in respect of a specified business carried on by the assessee during the tax year which has not been, or is not wholly, set off under sub-section (1) for that tax year.

      Coverage: Losses computed from specified businesses carried on by the assessee during any tax year; set-off is restricted to profits and gains of other specified businesses in the same year and, if unabsorbed, to profits and gains of specified businesses in subsequent years.

      Statutory Provision Mode

      Text & Scope

      Clause 114 provides a two-fold rule:

      • Sub-section (1): Any loss computed from a specified business carried on by the assessee during any tax year shall be set off only against profits and gains, if any, of any other specified business for that tax year.
      • Sub-section (2): The unabsorbed loss for a tax year shall be carried forward to subsequent years and set off only against profits and gains of any specified business computed for those subsequent tax years, iteratively ("and so on").

      Definitions in sub-section (3) delineate the meaning of "specified business" (via cross-reference to section 46) and "unabsorbed loss from the specified business" (as a residue not set off under sub-section (1)).

      Interpretation

      The clause's textual intent is to ring-fence losses arising from specified businesses so that such losses cannot be set off against non-specified business income; they are usable only against profits from other specified businesses in the same or subsequent years. The presence of a definitional sub-section suggests legislative intent to ensure internal consistency and to enable precise identification of losses that qualify for the rule. The phrase "only against" is restrictive and signals a textual limitation rather than a permissive guideline.

      Exceptions/Provisos

      Not stated in the document: any provisos, exemptions, or conditions permitting broader set-off (for example, against other heads of income) are not provided in Clause 114. Any exceptions must be sought elsewhere in the Bill or Act.

      Illustrations

      • Example 1: Assessee A carries on Specified Business X in tax year T and incurs a loss of INR 10 lakh. In the same year, A earns profits of INR 6 lakh from Specified Business Y. Under Clause 114(1), A may set off INR 6 lakh of the loss against the profits of Y; the unabsorbed INR 4 lakh is an "unabsorbed loss from the specified business" and is carried forward per Clause 114(2) to be set off only against future profits of any specified business.
      • Example 2: Assessee B has a loss from Specified Business X in year T but has taxable income from non-specified business activities in year T. Clause 114(1) precludes setting off the specified-business loss against non-specified business profits in year T; the loss may only be set-off against profits of other specified businesses in that year or carried forward per Clause 114(2).

      Interplay

      The clause expressly relies on the definition of "specified business" as referred to in section 46; therefore its operation depends on the scope of section 46. No other Rules, Notifications, or Circulars are referenced in the clause excerpt. Potential interpretive dependency: precise identification of what constitutes a specified business will determine the reach of the set-off restriction and the categories of profits against which carry-forward losses may be applied.

      Differences between the two provisions and practical impact

      Document 1 (Section 114, Income-tax Act, 2025) and Document 2 (Clause 114 of the Income Tax Bill, 2025 (Old Version)) present substantially similar substantive restrictions on set-off and carry forward of losses from a "specified business," but they differ in form, detail and definitional clarity.

      • Definitions: Document 2 expressly defines "specified business" and "unabsorbed loss from the specified business" in a subsection (3). Document 1 omits these definitions in the text shown and instead cross-references "specified business, referred to in section 46."
        • Practical impact: The Bill's explicit definitions remove ambiguity about terminology within Clause 114 itself; reliance on cross-reference (Document 1) requires reading section 46 for precise scope.
      • Expression of set-off rule: Document 2 states losses "shall be set off only against profits and gains, if any, of any other specified business for the said tax year." Document 1 states the loss "shall be set off only against profits and gains of another specified business."
        • Practical impact: Substantively similar; Document 2 emphasises the requirement to compute profits and gains "for the said tax year" and refers explicitly to the assessee's carrying on of the business, which frames application to the assessee-year context.
      • Carry forward mechanics: Document 1 provides a two-clause iterative mechanism in sub-section (2) with subclauses (i) and (ii) describing carry forward and further set-off across years. Document 2 has a single sub-section (2) stating that "unabsorbed loss ... shall be carried forward ... and shall be set off only against the profits and gains of any specified business ... and so on."
        • Practical impact: Both impose carry forward limited to specified business profits in subsequent years; Document 1's subclauses are more granular in procedural description, whereas Document 2 is more concise.
      • Assessee-centric language: Document 2 explicitly frames losses as "computed from a specified business carried on by the assessee, during any tax year." Document 1 does not use the phrase "carried on by the assessee" in the excerpt.
        • Practical impact: The Bill version makes express that the provision applies to losses from specified businesses actually carried on by the assessee in that year, clarifying the territorial subject of the rule.
      • Terminology of residual loss: Document 2 introduces the defined term "unabsorbed loss from the specified business;" Document 1 uses plain language "so much of the loss not so set off or the whole loss ... shall be carried forward."
        • Practical impact: The defined term in Document 2 aids drafting precision and facilitates cross-references elsewhere in legislation and subordinate instruments.

      Practical Implications

      • Compliance and risk: Taxpayers carrying on activities classified as specified businesses must segregate profits and losses arising from specified businesses from other income heads to ensure proper application of the restricted set-off. Failure to segregate may result in erroneous set-off and subsequent adjustments.
      • Record-keeping/evidence: The text implies recording of computation of losses "computed in respect of a specified business" and contemporaneous evidence of profits of other specified businesses in the same and subsequent years. Documentation showing that a loss arises from a specified business (as per section 46) will be necessary to justify application of this section; however, specific record formats or timeframes are not prescribed in the clause.

      Key Takeaways

      • Clause 114 restricts set-off of losses from specified businesses to profits of specified businesses only.
      • Unabsorbed losses may be carried forward and set off against future profits of specified businesses only.
      • The Bill-text includes express definitions for "specified business" (by cross-reference) and "unabsorbed loss from the specified business," improving drafting precision.
      • Clause 114 is an assessee-centric rule-losses must arise from specified businesses "carried on by the assessee" in a tax year.
      • No provisos or exceptions permitting set-off against non-specified business income are present in the clause excerpt.
      • Practical compliance requires segregation of specified-business computations and retention of records demonstrating classification and computation of losses/profits.
      • Full scope and application depend on the definition and scope of "specified business" as provided in section 46.

      Full Text:

      Section 114 Set off and carry forward of losses computed in respect of specified business.

      Topics

      ActsIncome Tax
      Next ➔