1[Losses under the head “Capital gains”

74. (1)(a) Where in respect of any assessment year, the net result of the computation under the head ‘Capital gains’ is a loss, such loss shall, subject to the other provisions of this Chapter, be dealt with as follows:—

(i) such portion of the net loss as relates to short-term capital assets shall be carried forward to the following assessment year and set off against the capital gains, if any, relating to short-term capital assets assessable for that assessment year and, if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following assessment year and so on;

(ii) such portion of the net loss as relates to capital assets other than short-term capital assets shall be carried forward to the following assessment year and set off against the capital gains, if any, relating to capital assets other than short-term capital assets assessable for that assessment year and, if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following assessment year and so on:

Provided that where, in the case of any assessee not being a company, the net loss computed in respect of such capital assets for any assessment year does not exceed five thousand rupees, it shall not be carried forward under this section.

(b) Notwithstanding anything contained in the Indian Income-tax Act, 1922 (11 of 1922), any loss computed under the head ‘capital gains’ in respect of the assessment year commencing on the 1st day of April, 1961, or any earlier assessment year which is carred forward in accordance with the provisions of sub-section (2B) of section 24 of that Act, shall be dealt with in the assessment year commencing on the 1st day of April, 1962, or any subsequent assessment year as follows: —

(i) in so far as it relates to short-term capital assets, it shall be carried forward and set off in accordance with the provisions of sub-clause (i) of clause (a) and sub-section (2); and

(ii) in so far as it relates to capital assets other than short-term capital assets, it shall be carried forward and set off in accordance with the provisions of sub-clause (ii) of clause (a) and sub-section (2).

(2) (a) No loss referred to in sub-clause (i) of clause (a) of sub-section (1) or sub-clause (i) or sub-clause (ii) of clause (b) of that sub-section shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed under this Act or, as the case may be, the Indian Income-tax Act, 1922 (11 of 1922).

(b) No loss referred to in sub-clause (ii) of clause (a) of sub-section (1) shall be carried forward under this section for more than, four assessment years immediately succeeding the assessment year for which the loss was first computed under this Act.]

 

1. Substituted by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962. Prior to its substitution, section 74 read as under:

‘74. Losses under the head “Capital gains”.—(1) Where in respect of any assessment year the net result of the computation under the head “Capital gains” is a loss to the assessee, such loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and set off against capital gains assessable for that assessment year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following assessment year and so on:

Provided that where the loss computed in respect of any assessee, not being a company, for any assessment year does not exceed five thousand rupees, it shall not be carried forward under this sub-section.

(2) No loss shall be carried forward under sub-section (1) for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.’

 

 

[As amended by Finance Act, 1964]