Income Tax Act, 2025
Section 7: Subs. by Act 20 of 2002, s. 29, for sub-section (1) (w.e.f. 12003).
7. Subs. by Act 20 of 2002, s. 29, for sub-section (1) (w.e.f. 12003).
325
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2[74A. Losses from certain specified sources falling under the head “Income from other
sources”.—3* * * * *
4[(3) 5*** In the case of an assessee, being the owner of horses maintained by him for running in
horse races (such horses being hereafter in this sub-section referred to as race horses), 6[the amount of
loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year
shall not be set off against income, if any, from any source other than the activity of owning and
maintaining race horses in that year and] shall, subject to the other provisions of this Chapter, be carried
forward to the following assessment year and—
(a) it shall be set off against the income, if any, 7[from the activity of owning and maintaining
race horses,] assessable for that assessment year:
Provided that the activity of owning and maintaining race horses is carried on by him in the
previous year relevant for that assessment year; and
(b) 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; so, however, that no portion of the loss shall be
carried forward for more than four assessment years immediately succeeding the assessment year for
which the loss was first computed.
Explanation.—For the purposes of this sub-section—
(a) “amount of loss incurred by the assessee in the activity of owning and maintaining race
horses” means—
(i) in a case where the assessee has no income by way of stake money, the amount of
expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly
and exclusively for the purposes of maintaining race horses;
(ii) in a case where the assessee has income by way of stake money, the amount by which
such income falls short of the amount of expenditure (not being in the nature of capital
expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of
maintaining race horses;
(b) “horse race” means a horse race upon which wagering or betting may be lawfully made;
(c) “income by way of stake money” means the gross amount of prize money received on a race
horse or race horses by the owner thereof on account of the horse or horses or any one or more of the
horses winning or being placed second or in any lower position in horse races.]
8[75. Losses of firms.—Where the assessee is a firm, any loss in relation to the assessment year
commencing on or before the 1st day of April, 1992, which could not be set off against any other income
of the firm and which had been apportioned to a partner of the firm but could not be set off by such
partner prior to the assessment year commencing on the 1st day of April, 1993, then, such loss shall be
allowed to be set off against the income of the firm subject to the condition that the partner continues in
the said firm and to be carried forward for set off under sections 70, 71, 72, 73, 74 and 74A.]
(w.e.f. 12003).
325
1* * * * *]
2[74A. Losses from certain specified sources falling under the head “Income from other
sources”.—3* * * * *
4[
5*** In the case of an assessee, being the owner of horses maintained by him for running in
horse races (such horses being hereafter in this sub-section referred to as race horses), 6[the amount of
loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year
shall not be set off against income, if any, from any source other than the activity of owning and
maintaining race horses in that year and] shall, subject to the other provisions of this Chapter, be carried
forward to the following assessment year and—
it shall be set off against the income, if any, 7[from the activity of owning and maintaining
race horses,] assessable for that assessment year:
Provided that the activity of owning and maintaining race horses is carried on by him in the
previous year relevant for that assessment year; and
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; so, however, that no portion of the loss shall be
carried forward for more than four assessment years immediately succeeding the assessment year for
which the loss was first computed.
Explanation.—For the purposes of this sub-section—
“amount of loss incurred by the assessee in the activity of owning and maintaining race
horses” means—
in a case where the assessee has no income by way of stake money, the amount of
expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly
and exclusively for the purposes of maintaining race horses;
in a case where the assessee has income by way of stake money, the amount by which
such income falls short of the amount of expenditure (not being in the nature of capital
expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of
maintaining race horses;
“horse race” means a horse race upon which wagering or betting may be lawfully made;
“income by way of stake money” means the gross amount of prize money received on a race
horse or race horses by the owner thereof on account of the horse or horses or any one or more of the
horses winning or being placed second or in any lower position in horse races.]
8[75. Losses of firms.—Where the assessee is a firm, any loss in relation to the assessment year
commencing on or before the 1st day of April, 1992, which could not be set off against any other income
of the firm and which had been apportioned to a partner of the firm but could not be set off by such
partner prior to the assessment year commencing on the 1st day of April, 1993, then, such loss shall be
allowed to be set off against the income of the firm subject to the condition that the partner continues in
the said firm and to be carried forward for set off under sections 70, 71, 72, 73, 74 and 74A.]