reddy drk (Tax Consultant) (51 Points)
13 January 2010 We got a doubt about setting off business loss against short term capital gain.
Sir, Can we setoff carry forward business loss (includes depreciation) against short term capital gain, which is as a result of depreciated business asset sale.
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 13 January 2010
yes......... you can................. but you can't set off short term capital loss against any other income except capital gains................whether short term/long term...........
Amir
(Learner)
(4016 Points)
Replied 13 January 2010
Dear DRK Reddy,
1) Brought forward Business losses CANNOT BE SETOFF AGAINST STCG......
2) Brought Forwad Unabsorbed Depreciatioan Can be set off against STCG.
3) Current Year Business Loss & Unabsorbed Dep Can be setoff against STCG.
Vaishali Bopardikar
(CA final passed)
(109 Points)
Replied 13 January 2010
yes amir is right...
b/f business loss can be setoff against business profit only.......
but b/f unabsorbed dep can be set off against STCG
Hareesh H Sharma
(Cleared IPCC..now article)
(894 Points)
Replied 13 January 2010
Yup Amir sir is right...i guess Love Arora missed the word carry forward biz loss in the ques
gaurang
(student ca)
(46 Points)
Replied 28 January 2010
aamir is right... carry fwd bs loss can se set off only frm business income
C.Balaji
(Learner)
(1867 Points)
Replied 28 January 2010
agree with Mr.Amir
Brought forward Business loss can only be set off against Business income - It cannot be set off against STCG
As rightly pointed out by Amir, Unabsorbed depreciation can be set off against STCG....
Current year Business loss can be setoff against any income except salary income.....
Bhavesh
(Service)
(23 Points)
Replied 16 April 2011
Dear Reddy,
You can very well claim brought forward business loss set off against short term capital gain if it is U/s. 50. Below Judgement will help you
Digital Electronics Ltd. v. ACIT135 TTJ 419 (Mum ITAT)
Hope after reading this judgement i am sure you will have smile on your face
have nice day
bhavla
Pankaj Gandhi Jaiswal
(Chartered Accountant)
(2629 Points)
Replied 05 March 2012
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Set of of Losses on Capital Gain Issue
Set off of losses in a first year
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
3- Any loss other than above can be set off against Any Gapital Gain ( See Section 71 relevant part underlined for this )
Carry forward of of losses in subsequent 8 years
1- Short Term Loss can be set off against Short Term & Long Term Capital Gain.
2- Long Term loss can be set off against Long Term Capital Gain only.
Important Note-
Please note that in case of loss on share securities or unit we have to consider section 94 (7) also wherein if some condition as per section fulfilled then loss on this shall be ignored if it does not exceeds its dividend income
Provision of section 71- See Italic part
Set off of loss from one head against income from another.
3271. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to 33 have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.
(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).
34[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set off against such income.]
(3) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]
35[(4) Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]
Anooj
(Chartered Accountant)
(2130 Points)
Replied 05 March 2012
hkverma
(officer)
(25 Points)
Replied 22 December 2013
| Originally posted by : Bhavesh | ||
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