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Short Term Capital Gain

Raj (Software) (45 Points)

13 June 2008

I bought a residential land two years backs and intending to sell it now.

Since it is less than 3 years, it is going to be short term capital gain. The capital gain amount is around 3,00,000. I have the following questions:

If I complete this transaction this month, should I pay the capital gain tax immediately or do I have time till March 2009 ?
I also have some short term capital loss (around Rs. 25000) and long term capital loss (around Rs.60000) from stock trading. Can I offset this against the capital gain from my property transaction?

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8 Replies

CA. Atindra A. Prabhu Bhatikar (practising CA) (68 Points)
Replied 14 June 2008

U r supposed to pay advance tax on ur transaction. It is advisable that u pay the required tax as soon as u settle the transaction and not wait until March for payment of tax so as to avoid interest u/s 234 B and 234 C

U can use the short term capital loss on shares to set-off against short term capital gain. But long term capital loss has to be set off against loss term capital gain only and no other head. Therefore u cannot get the benefit of set-off of long term capital loss of Rs.60K in ur current transaction

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ankit (STUDENT) (27 Points)
Replied 14 June 2008

1- no 2-yes

ankit (STUDENT) (27 Points)
Replied 14 June 2008

1- no 2-yes

Devendra Goyal (Service) (24 Points)
Replied 14 June 2008

You should have to fistly deposit advance tax as per rules on arose of capital gain.

Short Term Capital Loss can be set off against any income under the head Capital Gains but Long Term Capital Loss can be set off only against long Term Capital Gain in Future Years. So Benifit of Rs.60000 can not awail from Short Term Capital Gains.

BKJ (S) (24 Points)
Replied 28 March 2009

I am planning to sell a plot which i bought 3 years back. so i will have some long term capital gains. ( A )

I have some short term capital loss ( < 1 yr in equity mutual fund ) - ( B )

and long term capital loss ( > 1 yr in equity mutual fund). - ( C )

Questions:

1. can i offset my both STC Loss and LTC Loss from equity market with my LTCG from plot sale.

2. If yes then do i need to pay capital gains now on my actual profit i.e (A - B - C). And what rate i should pay the tax. 20% with indexation or 10 % flat.

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Vinay Chopra (CA ) (197 Points)
Replied 03 April 2009

hi, Speculation loss can be set off against only speculation gain. Hence u cannot set off STCL arising from sale of shares (speculation with sale of plot(non speculation).

LTCG @ 20% will be applicable to u.

However, exemption u/s 54 EC & 54 F can be availed by u.

BKJ (S) (24 Points)
Replied 04 April 2009

thanks Vinay,

can you also tell me if this is possible.

long term capital gains from equity > 1 yr ( A )

short term capital loss ( < 1 yr in equity mutual fund ) - ( B )

long term capital loss ( > 1 yr in equity mutual fund). - ( C )

Q: What ARE possible options ?

1. A - B - C

2. A - B

3. carry forward B + C losses to next year

One more question:

I also have short term capital gain from sale of foreign held equity - D.

Can i do this:

1. A + D - B - C

2. A + D - B

3. carry forward B + C losses to next year

Thanks in advance.

Vinay Chopra (CA ) (197 Points)
Replied 04 April 2009

STCL can be set off against Any Capital Gains and LTCL can be set off against LTCG. Therefor, A-B-C is possible. However it must be kept in mind that where net result under the head capital gain is a loss such capital loss cannot be set off against any othet income head and has to be carry forward.

In case of second part if there is DTAA with that country then it shall not be taxable in India. Otherwise option 1 is ok.