It is proposed to insert a new clause (ix) in sub-section (2) of the aforesaid section so as to provide that where any sum of money, received as an advance or otherwise in the course of the negotiations for transfer of a capital asset, is forfeited and the negotiations do not result in transfer of such capital asset, then, such sum shall be chargeable to income-tax under the head “income from other sources”.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years. Clause 26 of the Bill seeks to amend section 73 of the Income tax Act relating to losses in speculation business.
The existing provisions of section 73 provide that losses incurred in respect of a speculation business cannot be set off or carried forward and set off except against the profits of any other speculation business. Explanation to section 73 provides that in case of a company deriving its income mainly under the head business (other than a company whose principal business is business of banking or granting of loans and advances), and where any part of its business consists of purchase or sale of shares such business shall be deemed to be speculation business for the purpose of this section.
It is proposed to amend the said Explanation to section 73 so as to provide that the provisions of the said Explanation shall also not be applicable to a company the principal business of which is the business of trading in shares.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent years.