Can LTCL on Equity in previous year be setoff this year with LTCG on Property

Tax queries 311 views 2 replies
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SWO
35 Points Joined June 2011

I incurred short term capital loss on equity and long term capital loss on equities in previous years (2021-22 & 2022-23). I had long term capital gains on property this year. 

Now can I setoff the previous years STCL & LTCL on shares with the current year LTCG on property.

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On 13 September 2024 at 10:59 Report
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Master in Accounts & high court Advocate
9505 Points Joined December 2011

Yes, you can set off the previous years' Short Term Capital Loss (STCL) and Long Term Capital Loss (LTCL) on equities against the current year's Long Term Capital Gains (LTCG) on property. Here's how to do it: 1. _Set off STCL_: First, set off the STCL on equities against the LTCG on property. This will reduce the LTCG on property. 2. _Carry forward LTCL_: If the LTCL on equities is more than the LTCG on property, you can carry forward the excess LTCL to future years. 3. _Set off LTCL_: If you have any remaining LTCL after setting off STCL, you can set it off against the LTCG on property. Note: - STCL can only be set off against STCG or LTCG. - LTCL can only be set off against LTCG. - You can carry forward LTCL for 8 years.

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On 13 September 2024 at 12:46
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Master in Accounts & high court Advocate
9505 Points Joined December 2011

Yes, you can set off the previous years' Short Term Capital Loss (STCL) and Long Term Capital Loss (LTCL) on equities against the current year's Long Term Capital Gains (LTCG) on property, but only to a certain extent. As per the Income Tax Act, 1961: - STCL can be set off against STCG or LTCG (in this case, against LTCG on property). - LTCL can only be set off against LTCG (in this case, against LTCG on property). However, there's a restriction on setting off LTCL against LTCG on property: - Only up to ₹2 lakhs of LTCL can be set off against LTCG on property in a financial year. So, you can: 1. Set off STCL on equities against LTCG on property (no restriction). 2. Set off up to ₹2 lakhs of LTCL on equities against LTCG on property. 3. Carry forward excess LTCL (if any) to future years (up to 8 years).

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On 13 September 2024 at 13:08


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