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Query regarding short term tax gain!

222 views 8 replies

Swady

Digital World

115 Points Posted on 24 January 2018

Hi, due to trading in shares, I have incurred short term gains. So can that be adjusted with a loss in short term share trading? If yes, if I book losses today, can I re-buy the shares again after 3days?

Note: I also have a long term loss from share trading as well.

Replies (8)

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Posted on 24 January 2018

long term capital loss can be setoff against long term capital gain only. long term capital loss from sale shares cannot be adjusted against any income since long term capital gain from sale of shares is exempted under section 10(38)

Swady

Digital World

115 Points Posted on 24 January 2018

Let me rephrase my question. Can I reduce my short term gain tax by incuring short term loss? If yes, then after how many days can I re-purchase the sold shares?

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Posted on 24 January 2018

short term capital loss can be adjusted against short term capital loss

Swady

Digital World

115 Points Posted on 24 January 2018

Okay so after how many days can I re-purchase the sold shares?

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Posted on 24 January 2018

this phrase of your query I can't understand... for shares, if the holding period is less than 12 months then it is short term capital asset

Prosenjit Sardar

ACCOUNTANT

65 Points Posted on 25 January 2018

I want to know which value of shares to be taken is it book value i.e. the amount of purchase or the market value for closing value ?

RAMAKRISHNAN R

INCOME TAX OFFICER

1736 Points Posted on 25 January 2018

cost value or marker value which ever less

Manjula Moorthy

Qualified CS CA Finalist

209 Points Posted on 25 January 2018

Let me rephrase the answer for you. Short Term Capital Losses can be adjusted with Short Term Capital Gains. Now in your case the first transaction is over. After 3 days you may enter into a new transaction. The Capital gains arising there is separate. That can be adjusted with Short Term Capital gains/Losses if (1) The transaction is short term in nature, (2) There exist STCG/STCL balance after adjustment.

Secondly, Long Term Capital Gains is exempt u/s 10(38). You cannot set-off the long term losses with Short Term or carry forward it nor adjust it with Other Long term Capital Gains arising in other Assets..

Hope that solves your query.