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Long/short term capital loss

scg (ed) (44 Points)

03 January 2021

I have following question on the subject mentioned above

1In AY2020-21,short term long term CG is to be calculated with reference to some base year probably 2018 and not actual buy price in the past. What is this date? Can someone give an example to make the point clear? Who has to give this value broker or tax preparer.?

2 I have suffered Rs32lakh loss in FY 2020-21 in day trading inF&O.I have not maintained any account, I am considering not to reflect this income as this seems to be only way to face this year's tax return, unless someone can give me a simpler solution. What are likely to be implications of not reporting the loss. Earlier years i used to report losses without maintaining account as this year position seems to be different as more data is required which i have not maintained.

Thanks

S C Goswami

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3 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 03 January 2021

The single most important reason to file with F&O trading is to be able to benefit from losses you have incurred. If your business resulted in a loss, don’t worry, report it in your tax return. It can be adjusted from income from remaining heads such as rental income or interest income (cannot be adjusted from salary income). Any unadjusted loss can be carried forward for eight years. However, in the future, they can only be adjusted from non-speculative income. F&O trading loss is considered a non-speculative loss. Intra-day stock trading is considered as a speculative loss. And it can only be adjusted against speculative income. Unadjusted speculative losses can be carried forward to four years.

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scg (ed) (44 Points)
Replied 04 January 2021

Hello Saurav,

For the time being, I am not considering the benifit of reporting loss to take advantage in future by adjusting this loss in futureprofit.What my worry is that I do not maintain a/c of daily transaction and depend totally on broker maitained a/c.I just want to know if not reporting losses in IT return there are no IT complications.

Thanks

S C goswami

Read more at: https://www.caclubindia.com/forum/long-short-term-capital-loss-567694.asp

Smit Shah (524 Points)
Replied 04 January 2021

Itvis better to maintain books of accounts as the loss is huge and also get audited same only thise who are opting for presumtive tax are not required to maintain books of accounts