Hello, I sold my apartment within 2 years and underwent a short term capital loss of Rs. 5,60,000 in May 2018. I also had a long term capital gain of Rs. 30000 by setting stock in August 2018. While filing income tax for FY 2018-19, I was able to set Rs. 30,000 off against the loss from property sale. I understand the remaining Rs. 5,30,000 can be carried forward for upto 8 years. I have a long term capital gain of Rs.1,60,000 from equity mutual fund sale in September 2019. I plan to invest in PPFAS liquid fund - growth option and do a systematic transfer to another equity fund on a monthly basis. This will need be to redeem every month which will result in short term capital gain from debt fund from Oct 2019-March 2020. I have the below two questions. 1. Can I set off long term capital gain of Rs.1,60,000 from equity mutual fund mentioned above in FY 2019-20 against the remaining carried forward short term capital loss from property sale of Rs. 5,30,000 in year 2 or FY 2019-20? 2. Can I set off short term capital gain from PPFAS liquid debt fund growth option redeemed in FY 2019-20 against the remaining carried forward short term capital loss from property sale of Rs. 5,30,000 in year 2 or FY 2019-20? I will choose dividend option if I cannot set off the property loss and if property loss from year 2 can only be set off against property gain (same head) since its tax efficient since I have a higher income bracket. Thanks!
Hello Sir,
1. Yes, you can.
2. Yes, you can set off short term capital gain from PPFAS liquid debt fund growth option redeemed in FY 2019-20 against the remaining carried forward short term capital loss from property sale of Rs. 5,30,000 in year 2 or FY 2019-20.
You can set off short term capital loss from short term capital gain as well as long term capital gain.
The nature of income does not matter.
Thanks for the clarification. So, I take it, that short term capital loss from property sale can be set for for the next 7 years against capital gain/loss from debt/equity mutual funds for the coming years. Is that understanding correct? Also, can it also be set off against gains from direct stock sales, fixed deposit interest, interest from NCD public issues as well? Basically can it be set off agains any capital long/short term gain? Thanks! Also,
1. Yes.
2. Yes
Short term capital loss can be set off against any type of capital gain but it cannot be set off against fixed deposit interest or interest from NCD public issue as same would be taxed under income from other sources and not capital gain income.
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Thank you.
Yes, your understanding correct.
The short term capital loss from property sale can be set for for the next 7 years against capital gain/loss from debt/equity mutual funds for the coming years
However, the interest income is part of income from other sources. So you can not set off the STCL from income from other sources.
Loss from transfer of a short term Capital Asset can be set off against gain from transfer of any other capital asset (Long Term or Short Term) in the same year. Loss from transfer of a Long term Capital Asset can be set off against gain from transfer of any other long term Capital Asset in the same year.
If there is a net loss under the head “Capital Gains” for an assessment year, the same cannot be set off against any other head of income viz., Salaries, House Property, Business or Profession or other sources. It has to be separated into Short term Capital Loss (STCL) and long term capital loss (LTCL) and carried forward to next assessment year. In the next year, the STCL can be set off against any gains from transfer of any capital asset (Long term or Short term) and the LTCL can be set off against gains from transfer of long term capital asset only. Any unabsorbed loss after such set off can be further carried forward to next assessment year.
Capital loss computed in an assessment year can be carried forward for eight assessment years and set off as above.
Hi
1. Yes, set off shall be available.
2. Yes.
Yes, it can be carried forward upto 8 years and set off shall be possible against long term or short term capital gains.
You cannot setoff this loss with income under any other head. FD interest, etc are covered under income from other sources and not under capital gains.
Dear Sir,
Hope you are doing well !!
1. Yes.
2. Yes.
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.
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.
Hello,
1. You, you can set off.
2. Yes.
I hope that this answer satisfies your requirement.
Regards,
CA Hunny Badlani
Yes, it can be set off in the next 7 years.
Not from Interest income since that it is part of other sources head.
- Short term capital loss can be adjusted against only short and long term capital gain and not against other sources of income.
- In case of LTCG of Rs.1,60,000 equity fund, Rs.1 lacs is exempt and Rs.60,000 will be set-off.
