Set-off of long term capital gain and long term capital loss

Tax queries 305 views 4 replies

 

FY 2017-18 - A person (non-senior citizen) has Long Term Capital Gain and Long Term Capital Loss ( both after indexation) in the same FY 2017-18. Is he compulsorily required to set-off the LTC Loss against the LTC Gain in his Tax Return? OR: Can he add the LTC Gain to his other income and pay tax on it (if applicable) and carry forward the entire LTC Loss to future years? An example is given below.

 

a) Total taxableincome (after Section 80 deductions from gross income)  Rs 2,70,000/-

b) LTC Gain after indexation Rs 25,000/-

c) LTC Loss after indexation Rs 75,000/-

If LTC Gain (b) is added to (a), total taxable income will be Rs 2,95,000/-. on which he pays tax after Section 87A rebate. He can thus carry forward the entire LTC Loss of Rs 75,000/- to future years for set-off against future capital gains, as he expects high LTC Gain the next FY. Is this permitted, or whether he has to compulsorily adjust (b) against (c) to the extent of Rs 25,000/- and carry forward the unabsorbed LTC Loss of Rs 75,000/- less Rs 25,000/- = Rs 50,000/- to future years?

 

Thank you for your answers.

Replies (4)

The LTCG and LTCL will get automatically set off with each other while you will be filling up the Return Form as this is intra head items. So, you are eligible to carry forward LTCL only Rs.50,000 to the next year.

Thank you.

If you have Income in F/Y 2017-18, Then you have to Set-Off your Loss to the Extent of your Income.

You have to Set Off your LTCL of Rs. 25,000 by LTCG. and Carry Forward remaining Rs. 50,000 to the Next Year.

Thank you.


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