Bond Washing V/s. Short Term Capital Gain Loss

Tax planning 1027 views 2 replies

Eric_K

Article Ship

37 Points Joined December 2008

If during course of Assessment an AO finds ST Capital Loss in assessee's return can he disallow the loss so claimed under the pretext of 94(7) ..........???? means from sources he can find the record date of the scrpis so sold & if they fall within range of 3-9 months (as they are likely to fall) and disallow the loss to the extent (cost - sale consideration - dividend received) THE MATTER DOES NOT SEEMS TO BE SUBSTANTIAL BUT PLEASE IF ANYONE CAN GUIDE

Replies (2)

Piyush Jain

283 Points Joined July 2008

pls be more specific, your question is too wide from the off stump to even entertain any thoughts of even playing it.

imkdm

Student

107 Points Joined November 2008

Section 94 (7), contemplates that when securities are purchased for earning dividend and later sold at loss, then loss shall be ignored. However where such loss exceeds amount of income received from such transactions (dividend, interest etc.), such excess amount of loss shall be allowed. Hence, Loss to be allowed=(Actual Loss) - Income form Bond Washing Transactions. Also, it is of concern to see actually any income is derived from loss making securities or units or not.