Capital gains and loss set off

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Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2013 Res. Sirs,
Assessee sold immovable property(res. flat) in fy 2011-12. long term Capital gains comes to 12 lakhs approx.He incurred a loss of Rs 4.75 lacs in intraday and short term equity and F&O Trading in fy 2011-12.
MY QUESTION IS
DOES THE INCOME TAX RULES PROVIDES FOR SET OFF OF SHORT TERM LOSS IN EQUITY AND F&O TRADING AGAINST LONG TERM GAIN IN IMMOVABLE PROPERY IN THE SAME FY?
I am asking about set off in the same fy because the return is going to be filed belatedly and I am aware that the losses can't be carried forward now at this stage.

please reply quickly
thanks in advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 October 2013 1. Firstly, profits/losses earned from intra day trading are taxable as speculation business under the head Income from Business of Profession.

It is NOT taxable under the head Capital Gains.

Loss from speculation business CANNOT be set off from any other income.

2. Short term loss from normal trading in equity shares can be set off from long term capital gains.

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Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2013 Dear Siddhartha Sir,
With great respect I repeat that my query was regarding both intraday and short term equity as well as F&O Tading.You have answered my question relating to intraday trading in equity and F&O that it is speculative income and is treated as income from business and profession.
The second part of my question is whether non-intraday/short term losses in F&O trading can be set off against long term capital gains from sale of immovable property?
Shall very much appreciate if you answer this question.Am asking because section 43

CA Pallav Singhania

CA Pallav Singhania (Expert)
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13 October 2013 Transactions of trading in derivatives entered into on recognised stock exchange through a broker, or SEBI recognised intermediary and supported by a time stamped contract note is excluded from the definition of speculative transaction u/s. 43(5)(d).
Thus, loss from such transactions can be set off against any other income.

Loss from Business or Profession (other than speculation or depreciation) can be set off in the same assessment year against any head except Salary,
But In subsequent Assessment Year set off can be done against only Business Income..

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 October 2013 Dear Author, I have mentioned in the 2nd part of my earlier answer that non-intraday gain can be set off from LTCG.

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2013 Dear Siddhartha Sir,
There was some confusion left in my mind even after your first reply since my question was also regarding F&O Trading whereas your reply mentioned" short term loss in normal trading in equity " but did not say anything about short term loss in FNO Trading.
Thanks !

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