Prashant (Service) (24 Points)
30 November 2012I have a small query as regards to Long term Capital Loss. I had bought few Shares in 2009-10 and have sold them on 29th Nov'12 incurring a loss of Rs 75,437/-.
Is their any provision by which I can claim rebate on the above losses at the time of filing returns. I am in Service with a Pvt Company and get monthly salary. Or I should forget these losses.
Thanks..
Vineet Jaiswal
(CA)
(141 Points)
Replied 30 November 2012
The shares were held for more than a year and hence the loss is categorised as Long Term Capital Loss (LTCL)
Generally, LTCL is allowed to be set off with Income from LTCG(Long Term Capital Gains). Moreover, LTCG if subjected to STT is exempt u/s 10(38) of the IT Act, 1961.
In your case, if at the time of sale the proceeds were subject to STT then these LTCL cannot be set off since loss from an exempt source cannot be set-off with profits from a taxable source.
Eshita Shah
(Assistant Accounts Manager)
(26 Points)
Replied 01 December 2012
Hi Prashanth,
Here since your shares are held for more than one year the loss is long term capital loss. And as per Section 74 of Income Tax Act you can set of a Long Term Capital Loss only against a Long Term Capital Gain. Now suppose you dont have a corresponding Long Term Capital Gain to sett off your loss, you can carry forward this Long term loss for a period of 8 assessment years. Suppose you have traded in listed shares then any gain from such shares shall be exempt U/S 10 (38). In such case you cannot carry forward ur loss. I hope i have made ur doubts clear.
CAclubindia
