ANIL KUMAR JAIN (PRACTISING CONSULTANT) (65 Points)
21 June 2011HI FRIENDS
WHILE LEARNING ACCOUNTING I've LEARNT HOW TO DO JOURNAL ENTRIES FOR FORFEITURE OF SHARES IN THE BOOKS OF THE COMPANY WHICH FORFEITED THE SHARES
BUT CAN ANY ONE TELL ME HOW TO ACCOUNT IN MY BOOKS IF MY PART INVESTMENT IN SOME COMPANIES SHARES HAVE BEEN FORFEITED CAN I CLAIM IT AS A LOSS AGAINST SHORT-TERM CAPITAL GAIN OR NOT...
I THINK IT CANNOT BE CLAIMED AS A LOSS BUT ITS A CAPITAL LOSS HOW DO I ACCOUNT IT IN MY BOOKS KINDLY TELL ME...
THANKING YOU...
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 21 June 2011
if held as business investment than it would be treated as loss
ANIL KUMAR JAIN
(PRACTISING CONSULTANT)
(65 Points)
Replied 21 June 2011
wht kind of loss shall i treat it..
i'm investing in shares everyday its my business
shall i take it as short term capital loss and carry forward under short term capital gain loss and set off against future profits or present profits
loss is of 2 lacs
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 21 June 2011
as you r a trader of shares hence it should be treated as trading loss
Shouvik Chakraborty
(B.COM CA FINAL ACCOUNTS EXECUTIVE)
(120 Points)
Replied 21 June 2011
it depends on the nature of activity of your organisation. if your main activity is trading then it is a business loss and should be charged to profit & loss account, if not, then it is a capital loss and that part of investment which is forfeited, should be set off against investment.
ANIL KUMAR JAIN
(PRACTISING CONSULTANT)
(65 Points)
Replied 21 June 2011
Friend Think a normal employee has invested in some co. and his money was forfeited wht will b ur reply in tht case
I think there shall also be a provision under the ACT specially for this.. even though this doesnt happen much.
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 22 June 2011
just like investments value will be nil.
it will be short term capital loss if the shares held for less than 12 months otherwise long term remember if long term capital gain accrue on the shares which are listed on recognised stock exchange ( STT charged ) then it cannot cliam as loss.
CAclubindia
