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Stcg on sale of property

25 October 2013

I have sold a property and there is a STCG of Rs. 15.00 lakhs. In the same year I am having business loss and short term capital loss on shares. Can the same be adjusted????

Please clarify.

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8 Replies

Rajiv Kaparthy (IPCC student) (41 Points)
Replied 25 October 2013

Originally posted by : Vishhal K Bhartia
	I have sold a property and there is a STCG of Rs. 15.00 lakhs. In the same year I am having business loss and short term capital loss on shares. Can the same be adjusted???? Please clarify.

as far as i can recall, as per sec. 72, business loss cannot be set-off against STCG, it must be carried forward until it can be set-off against business profits if any. and STCL from shares can be set-off against STCG.

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Vishhal K Bhartia (Partner) (38 Points)
Replied 25 October 2013

Originally posted by : rajiv
	Originally posted by : Vishhal K Bhartia I have sold a property and there is a STCG of Rs. 15.00 lakhs. In the same year I am having business loss and short term capital loss on shares. Can the same be adjusted???? Please clarify. as far as i can recall, as per sec. 72, business loss cannot be set-off against STCG, it must be carried forward until it can be set-off against business profits if any. and STCL from shares can be set-off against STCG.

I am having short term capital loss on sale of shares of Rs. 10.00 lakhs. SO as per your reply I can adjust STCG on Sale of property of Rs. 15.00 lakhs from STCL on Sale of shares of Rs. 10.00 lakhs. So Net STCG will be Rs. 5.00 lakhs.?????

Aman (Finance Professional) (604 Points)
Replied 25 October 2013

yes vishal..it can be adjusted as you write..

Mihir (Wealth Manager) (5293 Points)
Replied 25 October 2013

No, STCG cannot be set off with business loss. STCG can be adjusted with STCL.

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 26 October 2013

1.Business loss can be set-off against any capital gain. and also any other source of income(except salary)....but capital loss(ST/LT) cannot be set off against any source of income ...

2. ST capital loss can be set off against aST/L:T cap mgain but LT cap loss can be set off only against LT cap gain

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CA Pallav Singhania (IT System Auditor) (33362 Points)
Replied 26 October 2013

Agree with Saurabh ji,

Short term Capital gain can be set off against Short term gain on sale of Property in your case.

Sr. No.	Section	Types of Loss	Set Off against Income		Can be carried forward (subject to Notes 4 and 8) for
			In same Assessment Year	In subsequent Assessment Year
1	71/72	Business or Profession (other than speculation or depreciation)	Any income under any head except Salaries	Business Income only	8 years
2	32(2)	Unabsorbed Depreciation	Any income under any head except Salaries	Any income under any head except Salaries	No restriction for of years number
3	73	Speculation Loss	Speculation profit only	Speculation profit only	4 years [8 years up to A.Y. 2005-06]
4	70/74	Short-term Capital Loss r.w.s. 94(7) in respect units of mutual funds or UTI/ securities & 94(8) in respect units of mutual funds or UTI (Notes 7 & 8)	Any Capital Gain	Any Capital Gain	8 years
5	70/74	Long-term Capital Loss (other than equity shares and units of equity oriented mutual fund which are subjected to STT)	Long-term Capital Gain	Long-term Capital Gain	8 years
6	71/74	Long-term Capital Loss on equity shares & units of equity oriented mutual fund which are subjected to STT	Not eligible for set off	Not eligible for set off	N.A.

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Rajiv Kaparthy (IPCC student) (41 Points)
Replied 28 October 2013

Originally posted by : Vishhal K Bhartia
	Originally posted by : rajiv Originally posted by : Vishhal K Bhartia I have sold a property and there is a STCG of Rs. 15.00 lakhs. In the same year I am having business loss and short term capital loss on shares. Can the same be adjusted???? Please clarify. as far as i can recall, as per sec. 72, business loss cannot be set-off against STCG, it must be carried forward until it can be set-off against business profits if any. and STCL from shares can be set-off against STCG. I am having short term capital loss on sale of shares of Rs. 10.00 lakhs. SO as per your reply I can adjust STCG on Sale of property of Rs. 15.00 lakhs from STCL on Sale of shares of Rs. 10.00 lakhs. So Net STCG will be Rs. 5.00 lakhs.?????

yes. that is exactly what i meant.

Nikhil Kaushik (Fellow CA) (85761 Points)
Replied 28 October 2013

Dear Rajiv,

You need to correct your learnings on set-offs.

In this case, the assessee can set-off both the business loss and short term capital loss from shares against the short term capital gains from sale of property.