B/f Losses in Old/New Tax Regime

New / Old Tax Regime – B/F trading losses.

I have b/f losses of about 4 lacs from option trading, plus current year option trading losses of about 1 lac.

My salary income is about 7.3 lacs.

Query is:

If I opt new regime I will have to forget b/f losses plus I cannot c/f current losses, over all I will have to forget about 5 lacs of losses which I cannot set off in future against future profits in option trading if any.

If I opt for old regime I can c/f losses & can set off in future. But my current Tax will be around 20,000 after some deductions which are allowed in old regime.

What shall I do?

In new regime tax is zero, but future Tax setoff of about 20% on 5 lacs losses, i.e. about 1 lac tax benefit in future – but future profits are uncertain, may happen, may not happen.

In old regime I have to pay 20000 now from pocket.

Please Guide, go for Zero TAX New regime, or pay 20000 in Old Regime.

Replies (3)
Quick Summary
This discussion explores the dilemma of choosing between the old and new tax regimes when you have brought forward trading losses. The user has significant losses from option trading and is weighing the immediate tax savings of the new regime against the ability to carry forward and set off these losses under the old regime. The advice leans towards filing the appropriate Income Tax Return (ITR 3) even in the new regime to maintain a clear record and avoid potential future complications, despite the immediate tax benefit.

Go for new regime for this year. & save 20K

There is uncertainty about bough forward losses, as it were carried forward under old regime. Department has not clarified about its total loss, if you wish to opt for old regime  again.

Dear Dhirajlal Sir,

Thank you for your very clear reply.

Request you to for one more query about this.

under new regime, as option trading b/f losses & current losses are not allowed as set-off against future income, is it necessary to report/mention them in current year IT returns (in ITR2 as last year it was ITR2).

Or

Can I simply file just simple ITR 1 for salary income. And forget about losses, as set-off is not allowed in new regime.

Thanks in advance.

 

To safeguard against any future litigation/query/scrutiny, it would be advisable to file ITR 3.

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