Set off ltcg against business losses carried forward
This query is : Resolved
12 August 2012
Can I set off LTCG from sale of residential property against business losses (proprietorship) that are carried forward from previous years?
Thanks,
Kapil
Thanks,
Kapil
12 August 2012
Long term capital loss can be set off only against any other long term capital gain in the current year.
or it can be carried forward to next 8 assessment years to be set off in those years. provided u fill all ur returns upto due date in those years.
or it can be carried forward to next 8 assessment years to be set off in those years. provided u fill all ur returns upto due date in those years.
13 August 2012
Pankaj, I beg to disagree.
You can setoff LTCG (Gain) against STCL (Loss).
This year when I filed returns online, the Excel utility automatically setoff LTCG ( eg. Gold ETF) against STCL (Business Loss) and I had not way of controlling it.
Please share your thoughts.
Thanks,
Kapil
You can setoff LTCG (Gain) against STCL (Loss).
This year when I filed returns online, the Excel utility automatically setoff LTCG ( eg. Gold ETF) against STCL (Business Loss) and I had not way of controlling it.
Please share your thoughts.
Thanks,
Kapil
13 August 2012
@See
https://www.caclubindia.com/forum/details.asp?mod_id=63124&offset=1#.UCiCy52m-fY
Set of of Losses on Capital Gain Issue
Set off of losses in a first year
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
3- Any loss other than above can be set off against Any Gapital Gain ( See Section 71 relevant part underlined for this )
Carry forward of of losses in subsequent 8 years
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
Important Note-
Please note that in case of loss on share securities or unit we have to consider section 94 (7) also wherein if some condition as per section fulfilled then loss on this shall be ignored if it does not exceeds its dividend income
Provision of section 71- See Italic part
Set off of loss from one head against income from another.
3271. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to 33 have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.
(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).
34[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set off against such income.]
(3) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]
35[(4) Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]
https://www.caclubindia.com/forum/details.asp?mod_id=63124&offset=1#.UCiCy52m-fY
Set of of Losses on Capital Gain Issue
Set off of losses in a first year
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
3- Any loss other than above can be set off against Any Gapital Gain ( See Section 71 relevant part underlined for this )
Carry forward of of losses in subsequent 8 years
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
Important Note-
Please note that in case of loss on share securities or unit we have to consider section 94 (7) also wherein if some condition as per section fulfilled then loss on this shall be ignored if it does not exceeds its dividend income
Provision of section 71- See Italic part
Set off of loss from one head against income from another.
3271. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to 33 have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.
(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).
34[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set off against such income.]
(3) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]
35[(4) Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]
13 August 2012
1. Current year business loss can be set off against LTCG.
However, brought forward business loss can only be set off against business income.
It CANNOT be set off against income under any other head.
2. Also understand that loss is set off from gain and not vice-versa.
So you should write "STCL is set off from LTCG" and NOT "LTCG is set off from STCL".
This is what created the confusion.
However, brought forward business loss can only be set off against business income.
It CANNOT be set off against income under any other head.
2. Also understand that loss is set off from gain and not vice-versa.
So you should write "STCL is set off from LTCG" and NOT "LTCG is set off from STCL".
This is what created the confusion.
Message likes :
1 times
13 August 2012
Yes, Point taken. I did create confusion by writing the set-off in reverse :)
Thanks, Siddhartha.
You reply clarifies my doubts.
Thanks,
Kapil
Thanks, Siddhartha.
You reply clarifies my doubts.
Thanks,
Kapil
13 August 2012
You are welcome. You should use the thanks button to convey your thanks.
Message likes :
2 times
13 August 2012
Totally agree with siddhatha Bhardwaj.
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