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Capital gains tax

sudha (proprietrix) (113 Points)

26 March 2011

my friend had purchaed sundram tax saver mutual funds for 20000 on 24.4.2008 but redeemed for 12052 on 12.2.2011, incurring a loss of 7947. his only source of income is his pension income. can theloss be adj against his pension income?

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Lalit Kumar (Vice President ) (2213 Points)
Replied 26 March 2011

Income from MF is exempt u/s 10(35) of IT act. Since the Income is exempt, any loss incurred thereby cannot be claimed as per Sec 14A of IT Act.

apart from tat, the MF owned is a Tax saver MF, which has a lock in period too.. so any dividend claimed from it would have been exempt in tat yr..

So in my view, he cannot set off the loss..

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Balaji (Knowledge Seeker) (317 Points)
Replied 26 March 2011

Dear Sudha,

1) There seems to be some error.Sundaram Tax Saver Fund is an ELSS Fund and hence would have a compulsory lock-in period of 3 years from the date of purchase.Thus the units purchased by your friend in this Scheme could have been redeemed only on or after 24.4.2011.How did he redeem the units on 12.2.2011?

2) In any case the loss arising on the sale of an equity-oriented Fund(on which STT is paid) has to be ignored and cannot be off-set against any other income.

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 March 2011

Originally posted by : sudha
	my friend had purchaed sundram tax saver mutual funds for rs.20000 on 24.4.2008 but redeemed for rs.12052 on 12.2.2011, incurring a loss of rs.7947. his only source of income is his pension income. can theloss be adj against his pension income?