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Query Regarding Short term Capital gain

21 September 2009

Mr A has a short term capital gain on sale of property of Rs. 20,00,000 in May 2008 and he has given token money for the purchase of property in March 2009 of Rs 3,00,000 and the same is forfieted due non payment of balance amount,.Can Mr A adjust the loss on forfieture of Rs 3,00,000 against the above profits of Rs 20,00,000.

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Max Payne (employed) (2569 Points)
Replied 21 September 2009

No exemption or set off is available to him regarding this situation.

STCG does not have any provision for exemption in any circumstance. This loss on forfeiture cannot be used by Mr.A.

The cost of acquisition of The person who forfeited the 300,000 gets reduced by this amount by virtue of section 51. But if the person who retains the sum was a realtor or developer, then this 3L would be his business income.