Exempted Income
This query is : Resolved
CA Ysil Karunai
(Querist)
24 October 2009
Dear Sir,
When long term capital gain on sale of shares (covered by STT) is fully exempt from tax u/s 10(38).
Query:
1. What about when incur a loss?
2. Whether the loss is carry forward?
3. u/s 14A any expenditure incurred towards exempted income it shall not be allowed as deduction, in such a case what about when loss incurred on exempted income as mentioned in above question?
When long term capital gain on sale of shares (covered by STT) is fully exempt from tax u/s 10(38).
Query:
1. What about when incur a loss?
2. Whether the loss is carry forward?
3. u/s 14A any expenditure incurred towards exempted income it shall not be allowed as deduction, in such a case what about when loss incurred on exempted income as mentioned in above question?
24 October 2009
1.Loss is also exempted.
2.Cannot be carried forward.
3.Expenditure against exempted loss will be disallowed.
2.Cannot be carried forward.
3.Expenditure against exempted loss will be disallowed.
24 October 2009
Where an income is exempt from tax which means income includes loss also.Such loss is not allowed to setoff and carry forward.
So, LTCL is exempt from tax. It is not allowed to setoff against another LTCG and also carry froward.
Section 14A remains the same both incase of exempted income and exempted loss.
So, LTCL is exempt from tax. It is not allowed to setoff against another LTCG and also carry froward.
Section 14A remains the same both incase of exempted income and exempted loss.
CA Gangadhar Mishra
(Expert)
24 October 2009
agreed with the experts
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