Upgrade and Save: Get 10% OFF on CAclubindia Pro Subscription! Use Code: SAVE10 Subscribe Now!

Long term capital loss.. can be carry forwarded...???

HITESH (chartered accountant) (441 Points)

17 June 2011

I'm having doubt regarding cary forward of long term capital loss, when there is a long term capital gain which is exempt...

Assume there is Long Term Capital Gain of 50,000/- and in the same year there is a long term capital loss of 10,000/-.

The above cieted GAIN is a LTCG came form sale of shares.....

Now, my doubt is:

what amount of Long Term capital gain is exempt Rs.50,000/- is exempt (or) net long term gain of 40,000/- is exempt... ???

Whether the long term capital loss of 10,000/- can be carry forwarded ???

Reply
Follow
Share

5 Replies

Shruthi (PCC Student) (111 Points)
Replied 17 June 2011

See, you've clearly started with long term capital gain which is exempt.

So you cant mention the net long term capital gain as Rs.40,000.

Tax implication in your case is:

L.T.C.G of Rs. 50000 is fully emempt.

Capital loss of Rs. 10,000 can be set off against any other taxable capital gain (if any) u've in that Financial Year. If you dont've such, then carry forward that 10,000 to the subsequent year and set it off against any Taxable L.T.C.G within 8 years.

Upgrade to CAclubindia Pro. Subscribe Now!

Anshu Garg (working) (139 Points)
Replied 17 June 2011

YA AGREED WITH SHRUTI

BECAUSE EXEMPTED INCOME/LOSS CANNOT BE SET OFF OR CARRIED FORWARD

HITESH (chartered accountant) (441 Points)
Replied 17 June 2011

"If income from a particular source is exempt from tax E.g; Income exempt from tax under section 10, loss from such source cannot be set off against income chargeble to tax"

i had read the above sentenced provision in SINGHANIA BOOK . From this we may say that Rs.10,000 loss cannot be carried forwarded????

Shruthi (PCC Student) (111 Points)
Replied 17 June 2011

Exactly ...

I'll give you an example.

Cc, Capital gain arised on long term listed securities which sufers security transaction tax (STT) is fully exempt u/s 10(38).

If you incur loss on such long term listed securities then you cant carry forward the loss of it since its corresponding gain is exempted.

Sandeep Surana (Practicing Chartered Accountant) (156 Points)
Replied 01 July 2011

Yes, Mr. Hitesh Absolutly right,

"If any income which is exempt from tax (Like Long Term Capital Gain arises from Shares is exempt U/s 10(36)) than Loss from such income niether set off in current year and nor carry forward in next year from Incomes which is chargeable to tax."