17 July 2010
I PURCHASED 100 SHARES ( AS INVESTMENT ) OF A LTD. @ RS.550 PER SHARE ON 1 APRIL 2008 AND SOLD 100 SHARES @ RS. 500 PER SHARE ON 31 DEC 2009
MY QUERYS IS : Q1. CAN LOSS ARISING OF SUCH WLL BE CARRIED FORWARD OR SET OFF ? IF YES UPTO HOW MUCH A.Y. AND FROM WHICH SOURCE/HEADS ?
Q2. WHAT WILL BE THE TREATMENT IF SUCH SHARE ARE HELD AS STOCK IN TRADE IN THE ABOVE RELATION ?
17 July 2010
point no.1 the loss arising out of the above would be treated as long term capital gain and it can be carried forward for a period of 8 years if the following condition is satisfied. it is not sold through recognised stock exchange and STT is not paid. if the condition is not satisfied, since gain is exempt loss cannot be carried forward if it is held as stock in trade then it is business income and loss can be carried forward for 8 years
18 July 2010
Loss from business can be set of against any other income of the current year except salaries. If business income is carried forward u can set off only against any business income in future years. Long term Capital loss can be set off against long term capital gain only.
i would like to you please make adjustment in the top above query as you have assumed that stt is not paid and not sold through recognised exchange, if
1. it is sold on BSE and STT is paid on the above shares
does that make any differnce in the opinion regarding setoff and cf
CAclubindia
