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Each transaction treated as seperate or pooled for trading

22 July 2016

I know that capital gains attract taxes while capital losses can be used to set off. But how are capital gains calculated.

If I have shares A and B, and I sell share A at long term capital gain 50 and sell share B at long term capital loss 100. Will my long term capital loss be be 50-100=-50? Or would they be treated individually so that ltcg is 50 and ltcl is -100.

Is each transaction considered seperate or are they considered together?

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2 Replies

Saurabh806 (Kanpur) (112 Points)
Replied 22 July 2016

If any Long Term Capital Loss arises on the sale of any asset, it is allowed to be set-off against long term capital gains arising from the sale of any asset.

However, long term capital loss arising from the sale of shares, mutual funds etc on which STT has been paid is not allowed to be set-off against any other capital gain. Therefore, long term loss arising from the sale of shares, mutual funds etc on which STT has been paid is also called as Dead Loss.

mohammad rasool baig (Management Consultant) (1026 Points)
Replied 23 July 2016

Long term capital gains on stock are exempted as per section 10(38). So LTCG will include long term capital losses & it is not allowed to set off the long term capital losses with other asset capital gains.