11. Amendment of section 40A.
In section 40A of the Income-tax Act, after sub-section (12) [as omitted by section 17 of the Finance Act, 1992 (18 of 1992)], the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2017, namely:-
“(13) No deduction or allowance shall be allowed in respect of any marked to market loss or other expected loss, except as allowable under clause (xviii) of sub-section (1) of section 36.”.
Notes on Clauses:
Clause 11 of the Bill seeks to amend section 40A of the Income-tax Act relating to expenses or payments not deductible in certain circumstances.
The aforesaid section provides for disallowance of certain expenses or payments while computing income under the head “Profits and gains of business or profession”.
It is proposed to insert a new sub-section (13) in the said section so as to provide that no deduction or allowance shall be allowed in respect of any marked to market loss or other expected loss except as allowable under the new clause (xviii) of sub-section (1) of section 36.
This amendment will take effect retrospectively from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years.
