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Is long term capital gain is taxable after selling of shares

prakash (B.Com) (132 Points)

13 June 2017

Hello Experts

I am salaried employee

1. I bought shares before 4 years and sold it now , Is Captical gain is TAXable for these shares If yes then Why it is Taxable because I have heard that shares sold after 1 year or 3 years is not Taxable .

2. If long term captial gain is in minus (-) i mean loss , then will I get some benefit\Expempt in TAX ?

2. What is Last date of submmiting ITR for salraries employees for finacial year 2016-2017

Thanks

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10 Replies

neeraj gupta (1138 Points)
Replied 13 June 2017

1. If u purchased your shares from a public stock exchange like NSE/BSE and paid STT, then long term capital gain is tax exempt for you.
2. No long term capital loss in above case won't give u any benefit.
3. Unless until changed last date for Salaried people is 31st July 2017

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chintan joshi (25 Points)
Replied 13 June 2017

1) If the equity share is held for more than 12 month and security transaction tax is paid on such sale and profit arise from such transaction than it is covered U/s 10(38) under which it is exempt from tax
3) the last date to file return for salaried employee is 31 July 2017
2) if the is loss then you can get setoff of that capital loss

Poltu Ghosh (Job) (1865 Points)
Replied 13 June 2017

Regarding your q no 2 about tax benefit of long term capital loss on sale of shares, it is pertinent to note that there is a case law which allowed set off of such long term capital loss from other long term capital gain. So if you have other long term capital gain which is taxable you can set off the same with the long term capital loss from shares

neeraj gupta (1138 Points)
Replied 13 June 2017

Thanks Mr Chintan and Mr Poltu. Can you please provide the ref to the case law. I have tried to update myself, my first two reads, one on charteredclub and another on cleartax confirms it as a deadloss.

neeraj gupta (1138 Points)
Replied 13 June 2017

Dear members please find a case as recent as 20th Mar 2017. https://www.in.kpmg.com/taxflaashnews/KPMG-Flash-News-Asara-Sales-and-Investments-Private-Limited-2.pdf. The Tribunal has overruled the AO because it was an off market transfer in which no STT was paid. Hence the long term capital loss was allowed. AO was contending this as a colorable device.

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neeraj gupta (1138 Points)
Replied 13 June 2017

So coming back to original question if the long term capital loss from shares is made while purchase and sale on a public stock exchange in India where STT is compulsorily charged, the loss is a deadloss with no benefit.long term capital loss can be adjusted only incase of off market transfer. Thanks for the correction Mr Chintan and Mr Poltu.

Poltu Ghosh (Job) (1865 Points)
Replied 13 June 2017

Please refer the case of RAPTAKOS BRETT & CO.. LTD. Vs DCIT (ITAT MUMBAI) in Appeal No. ITA NOs.3317/Mum/2009 & 1692/Mum/2010. In this case the Hon'ble Tribunal decided that Long Term Capital Loss on transfer of shares and mutual funds in which STT has been paid are eligible to be set off in terms of section 70 (3). Therefore such LTCLoss shall not be treated as dead loss.