Harshit (Arbitrager) (215 Points)
29 March 2012
Hi,
I have a query on Taxation and Set-offs from Derivatives.
My Trasactions are as Follows:
-Short term Gain from Options
-Short term Gain from Equities
-Long term loss from Equities.
My Question is as Follows:
1) Can i Setoff Short term Gain from Options with Long term Capital loss from Equities?
2) Can i Setoff Short term Gain of Options with short Term Gains from Equities?
Thanks
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 29 March 2012
options income is to be taxed under the head of "Income from business or profession".
1) long term loss on equities are capital loss and no tax treatment. it cannot be set off against any other income.
2) how is it possible to set off income against income??
Harshit
(Arbitrager)
(215 Points)
Replied 29 March 2012
Firstlly STCG from F&O (instruments without delevry) shall be cosiderd as SPECULATION INCOME
whech can not be sett off againset any other income except Speculation Income
Further LTCL from equity is can not be sett off againsst any other income (as LTCG OF EQ IS EXEMPT)
So,
STCLs from equity can be sett off only gaised STCG for equity (spceal rate for that income 111A)
Thuse the answere to both the answere are Negative
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 30 March 2012
Parth, F&O are different business and cannot be considered as speculation at all.
Harshit, why would you want to set-off STCL against LTCG? LTCG is an exempt income rather c/f STCL to be set-off against future STCG.
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 31 March 2012
Parth, its good that you are working, but it is not right to go as per assumptions and logics as you might land up in trouble in your exams which are very critical. Be thourough with the words as reading and understanding each and every word in any law is the key to find loop holes and better interpretation. best of luck..
Neha Popat
(CA in Practice- Direct Taxation)
(94 Points)
Replied 05 April 2012
For a share trader loss/profit from equities is also business loss/profit and hence option loss/profit can be set-off against each other... otherwise i agree wth Ankit... if the issue pertains to companies then Explanation to Section 73 as well as Section 43(5)(d) has to be considered in view of many recent decisions... If that is your case then do give the details and i will post the relevant decisions.
CAclubindia
