As per IT rules, the following are allowed
- Capital Gains (whether Long or Short Term) can be used until Taxable Limit of 2.5 Lakhs
- 1 Lakh of LTCG per year is exempt from tax
- LTCL can be set off only against LTCG, STCL can be set off against STCG or LTCG
Please consider the following two cases - CASE 1 and CASE 2 - where the STCG or LTCG within taxable limit is used or LTCG exemption 1 L per year is used to make the tax = 0 as per the Income Tax rules.
|
CASE 1 |
CASE 2 |
|
|
STCG |
2 Lakhs |
0 |
|
STCL |
0 |
0 |
|
LTCG |
0 |
3 Lakhs |
|
LTCL |
0 |
0 |
|
Other Income |
50K |
50K |
|
Gross Income |
2,50,000 |
2,50,000 (After 1L LTCG exemption) |
|
Tax |
0 |
0 |
Now consider the following 2 cases - CASE 3 and CASE4, where my income consists of only
Other Income of 50,000
STCG and STCL in the same year or
LTCG and LTCL in the same year
|
CASE 3 |
CASE 4 |
|
|
STCG |
2 Lakhs |
0 |
|
STCL |
1 Lakh |
0 |
|
LTCG |
0 |
3 Lakhs |
|
LTCL |
0 |
2 lakhs |
|
Other Income |
50K |
50K |
|
Gross Income as per ITR |
1,50,000 |
50,000 (After 1L LTCG exemption) |
|
Tax |
0 |
0 |
|
What I require |
Gross Income of 2,50,000
Carry forward STCL of 1 L for set off in future years |
Gross Income 2,50,000 (LTCG 2L + Other 50K with 1 L LTCG exemption)
Carry forward LTCL 2 Lakhs for set off in future years |
In these cases,in the ITR Form or ITR utility the following thing happens automatically, on which we have no control
STCL gets fully used up by Intra Head set off of STCG in the same year
or
LTCL gets fully used up by Intra head set off of LTCG in the same year.
However I want to use the STCG and LTCG until the taxable limit and still pay no taxes and carry forward the STCL and LTCL to future years for set off.
Currently this is not allowed by the ITR form or ITR utility ( Or at least I do not know the method by which this can be done )
The only way I can do this is by declaring my STCG and LTCG under Other Income so that I can carry forward the losses STCL and LTCL.
If I am missing something can some one tell me how the declarations or entries can be made in the ITR so that I use the STCG and LTCG within taxable limit and carry forward the STCL and LTCL?
CAclubindia
