Set-off of short term capital loss
This query is : Resolved
26 July 2010
How do you interpret the term ‘Loss Return’?
Does ‘loss return’ mean the total income to be a negative figure or a loss under any particular head?
Is there a difference between a ‘loss return’ (which is generally understood as a return where the total income figure is negative) & a ‘return of loss’ (which can be interpreted as a return where the income under any particular head is negative?
Facts of the case:
An assessee has a short term capital loss of `. 600000 in A.Y. 2009-2010. In A.Y. 2010-2011, the assessee earned a short term capital gain of `. 500000. However, the return for A.Y. 2009-2010 was not filed within the time-limit of section 139(1). As a result, the loss of `. 600000 could not be carried forward for set-off in the current assessment year. However it has been mentioned in the V K Singhania Ready Reckoner (Pg A-201 Para 98.4) that such delay may be condoned if a few conditions are satisfied vide Circular No. 8/2001, dated May 16, 2001 even though the return of loss is submitted after the due date.
In the given scenario, 3 options can be thought of:
1) Claim the benefit of set-off.
2) Not to claim the benefit, pay tax on `. 500000, & claim the refund with the appropriate authority
3) File revised return later.
Kindly advice whether the said set-off can be claimed?
Does ‘loss return’ mean the total income to be a negative figure or a loss under any particular head?
Is there a difference between a ‘loss return’ (which is generally understood as a return where the total income figure is negative) & a ‘return of loss’ (which can be interpreted as a return where the income under any particular head is negative?
Facts of the case:
An assessee has a short term capital loss of `. 600000 in A.Y. 2009-2010. In A.Y. 2010-2011, the assessee earned a short term capital gain of `. 500000. However, the return for A.Y. 2009-2010 was not filed within the time-limit of section 139(1). As a result, the loss of `. 600000 could not be carried forward for set-off in the current assessment year. However it has been mentioned in the V K Singhania Ready Reckoner (Pg A-201 Para 98.4) that such delay may be condoned if a few conditions are satisfied vide Circular No. 8/2001, dated May 16, 2001 even though the return of loss is submitted after the due date.
In the given scenario, 3 options can be thought of:
1) Claim the benefit of set-off.
2) Not to claim the benefit, pay tax on `. 500000, & claim the refund with the appropriate authority
3) File revised return later.
Kindly advice whether the said set-off can be claimed?
26 July 2010
Loss Return means negative figure or a loss under any particular head which could not be set off against eligible income of the current year.
Section 80 clearly specifies that losses can not be carried forwarded unless it is determined in pursuance of a return filed within the time allowed u/s 139(1).
Paying taxes on STCG of Rs. 500000/- is the only solution in this situation.
Section 80 clearly specifies that losses can not be carried forwarded unless it is determined in pursuance of a return filed within the time allowed u/s 139(1).
Paying taxes on STCG of Rs. 500000/- is the only solution in this situation.
27 July 2010
Hi Paras, thanks for your reply.
However, kindly refer to section 119(2)(b)& Circular : No. 8/2001, dated 16-5-2001.
However, kindly refer to section 119(2)(b)& Circular : No. 8/2001, dated 16-5-2001.
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