Capital Gain and Brought Forward Capital Loss

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This discussion clarifies how to manage capital gains tax. You can offset a brought forward short-term capital loss against a long-term capital gain. The remaining taxable capital gain can then be invested in 54EC bonds to further reduce your tax liability. It's advisable to make the 54EC investment within six months of the capital gain occurring and before filing your tax return.

sbali1976

sbali1976 (Querist)
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06 September 2023 Long term Capital Gain on Sale of Residential Property : Rs. 25 L
Brought Forward Capital Loss (Short-term capital Loss on Shares/Stock) : Rs. 15 L
Can we invest Rs. 10 L (25 L - 15 L) in capital gain bonds u/s 54EC and adjust balance capital gain of 15 L with brought forward capital loss.
Is this allowed or not, if yes, are there any restrictions or limitations ?
Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 Yes it's allowed no restrictions in such a case. Any how fill ITR and check it's allowed before 6 months from the date of long term capital gains ( before making 54EC deposit).

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sbali1976

sbali1976 (Querist)
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07 September 2023 Thanks for your reply. The capital gain has occurred in FY 2023-24. The relevant ITR will be available only from April 2024. My understanding is, LTCG 25L Less: Investment in 54EC Bonds 10L : Remaining Taxable LTCG 15L, Less: Brought forward Short-term Capital Loss: 15L, Balance LTCG 0

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 It's ok go ahead...

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sbali1976

sbali1976 (Querist)
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07 September 2023 Thanks a lot for your valuable input !!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 You are welcome...
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