Set off of loss arising from sale of shares - long term

Yes loss on sale of shares held for more than 1 year are eligible for set-off only against capital gains for 8 years. If the gains from sale of shares held for more than 1 year are prior to February 2018, then the total gains are not taxable.

Dear Sir,

1) Shares held for more than a year are long term capital asset and any gain arises from the transfer of such shares is exempt from tax. Similarly when gain from any source is exempt,loss from such source is not allowed.

2) If the sale is of listed securities which is long term then it is exempt.

Hi,

Set off of Capital Losses: The Income Tax does not allow Loss under the head Capital Gains to be set off against any income from other heads – this can be only set off within the ‘Capital Gains’ head. Long Term Capital Loss can be set off only against Long Term Capital Gains. Short Term Capital Losses are allowed to be set off against both Long Term Gains and Short Term Gains.

Carry Forward of Losses: Fortunately, if you are not able to set off your entire capital loss in the same year, both Short Term and Long Term loss can be carried forward for 8 Assessment Years immediately following the Assessment Year in which the loss was first computed. If Capital Losses have arisen from a business, such losses are allowed to be carried forward and carrying on of this business is not compulsory.

Treatment of Long term Loss on Shares and Equity Funds: There is no tax on Long Term Gains on Shares & Equity Funds, similarly Long Term Capital Loss on Shares and Equity Funds is a dead loss and therefore it cannot be set off or carried forward. Shares and Equity Funds are long term capital assets when held for more than 12 months.

Gains from sale of shares for prior period are grandfathered from the new amendment. Hence, they will be exempt provided they should be long term capital gains.

Thanks

Damini

Hi,

Gains from shares held for more than a year are exempt from tax so you would not be able to set off the losses arising from long term shares.

Since the transactions were done prior to February 2018, the gains, if long term in nature, will be exempt from tax.

Hope that clarifies.

Regards,

Nikhil.

.

Any losses or gain arising on sale of shares which were held for more than an year is exempt from taxes till 31 March 2018. So no question of set off arises.

Hope I am clear.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com