9911796707
TMI BlogAddresses the set-off of losses under various heads of income In Clause 109 of Income Tax Bill, 2025 Vs. Section 71 of the Income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Bill, 2025, addresses the set-off of losses under various heads of income. The provision is significant as it outlines the conditions under which taxpayers can offset losses incurred in one income category against gains in another, thereby affecting their overall tax liability. The clause is situated within a broader legislative framework aimed at refining the tax system to ensure fairness and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mechanism to manage their tax liabilities more effectively. Detailed Analysis 1. General Set-Off Rule:- Clause 109(1) allows losses incurred under any head of income (except capital gains) to be set off against income from any other head, including capital gains, for the same tax year. This provision is subject to specific conditions outlined in the sub-clauses. - Condition (a): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enting taxpayers from using them to offset non-capital income, which could lead to significant revenue losses for the government. Practical Implications The practical implications of Clause 109 are multifaceted, affecting individuals, businesses, and tax professionals: - Individuals: Taxpayers with multiple income streams must carefully manage their finances to optimize tax liability under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a broader scope for capital gains, permitting offset within its category, whereas Clause 109 restricts this more stringently. 2. Specific Restrictions:- - Profits and Gains of Business or Profession: Both provisions restrict the set-off of business losses against salary income, demonstrating a consistent legislative intent to separate personal and business income streams. - Income from Hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act, 1961, incorporating lessons from past legislative amendments and contemporary tax policy objectives. While the clause aims to ensure a fair and balanced tax system, its practical implementation will require careful navigation by taxpayers and their advisers. Future developments may focus on further clarifying these provisions or adjusting them in response to economic and fisc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
