Section 73 - Losses in speculation business - Income-tax Act, 1961

Losses in speculation business. 73. (1) Any loss, computed in respect of a speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation busi ness. (2) Where for any assessment year any loss computed in respect of a speculation business has not been wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no income from any other specula tion business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- ( i ) it shall be set off against the profits and gains, if any, of any speculation business carried on by him assessable for that assessment year ; and ( ii ) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on. (3) In respect of allowance on account of depreciation or capi tal expenditure on scientific research, the provisions of sub-section (2) of section 72 shall apply in relation to speculation business as they apply in relation to any other business. (4) No loss shall be carried forward under this section for more than 1 [ four ] assessment years immediately succeeding the assessment year for which the loss was first computed. 2 [ Explanation . -Where any part of the business of a compa ny ( 3 [ other than a company whose gross total income consists mainly of income which is chargeable under the heads Interest on securities , Income from house property , Capital gains and Income from other sources ] , or a company 4 [the principal business of which is the business of trading in shares or banking] or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares. ] ------------------------------------- Notes :- 1. Substituted for eight by the Finance Act, 2005, w.e.f. 1-4-2006. 2. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1977. 3. Substituted for other than an investment company, as defined in clause (ii) of section 109 by the Finance Act, 1987, w.e.f. 1-4-1988. 4. Substituted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of April, 2015, before it was read as, the principal business of which is the business of banking