BFLA & CFL can one selectively change the amounts

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 29 August 2021

Other way, not possible.

Rocks Parss (241 Points)
Replied 05 September 2021

So one has to forgo the benefit of Rs 1 lakh of long term capital gains exepmt under section 112A? or alternatively do not select compute set-off and entire brought forward losses of earlier years will be carried forward ! (incidentally in the earlier old portal manual overwriting and amending even after computing set-off was allowed) Maybe one has to plan and resort to tax loss harvesting before the financial year ends to avail the benfit of Rs 1 lakh exempt long term capital gains every year!.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 06 September 2021

Rules for set off of losses within the same head of Income :-

As per S-70(1) – Loss from any head of income other than capital gains can be adjusted against same head of income

As per S-70(2) – Loss from Short Term Capital Asset can be set-off against gains from any capital asset including Long Term Capital Gains (LTCG) ie; STCL can be adjusted against any other STCG or LTCG

As per S-70 (3) – Loss from Long Term Capital Asset can be set-off against gains from any other Long term capital asset only ie; LTCL can be adjusted against any other LTCG alone.

As per S-71, Loss from Capital gains cannot be adjusted against any other head of Income, however loss from other heads of income can be adjusted against any other capital gains.

Carry forward and Set off of Losses :

The losses if any arising in a financial year is not set off with any other income then such losses can be carried forward for either 8 years or 4 years depending on the type of loss, however the carried forward losses in the next financial year cannot be set off with any other head of income (except in case of loss arising on account of unabsorbed depreciation ) ie; Carried forward losses can be set off only with the same head of income and not with any other head of income.

Rocks Parss (241 Points)
Replied 08 September 2021

Thanks for for explicit reply.

Suppose for the current year there is only capital gains say of Rs 25000 under section 112A and we have earlier years brought forward losses of say Rs 50000, can we still carry forward the earlier capital losses to future years and not set-off against current years capital gains of Rs 25000 at our option? The reason being that in such a case the current years capital gains under section 112A being less than Rs 1 lakh no tax would be payable on the same and unaborbed capital losses from earlier years can be used in future for set-off?

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 08 September 2021

No. No choice.

Extracted from :: 21- MCQ set off and carry forward.Tutorials 2... isued by ITD.

"" Provisions under the Income -tax law in relation to carry forward and set off of
capital loss
If loss under the head “Capital gains” incurred during a year cannot be adjusted in the
same year, then unadjusted capital loss can be carried forward to next year.
In the subsequent year(s), such loss can be adjusted only against income chargeable to tax
under the head “Capital gains”, however, long-term capital loss can be adjusted only
against long-term capital gains. Short-term capital loss can be adjusted against long-term
capital gains as well as short-term capital gains.
Such loss can be carried forward for eight years immediately succeeding the year in
which the loss is incurred.
Such loss can be can carried forward only if the return of income/loss of the year in
which loss is incurred is furnished on or before the due date of furnishing the return, as
prescribed under section 139(1).""