Can one deduct amount invested in a sick company?

I have invested a huge amount over the last 4 years in a company. The company was struggling for all these years and now the bank has declared NPA status.

I am at a huge risk of loosing my entire investment.

Is there a possibility to deduct this in my future tax returns? I am an NRI and so don't have income in India, right now.

But if I sell some of my real estate can I offset these gains using my business investment losses?

Replies (9)
Quick Summary
An NRI investor is seeking to understand if they can deduct a significant investment made in a private company that has now been declared NPA by the bank. The company's failure, exacerbated by COVID-19, has put the entire investment at risk. The discussion explores the possibility of offsetting these investment losses against future capital gains from selling Indian real estate or other assets. It clarifies that loss adjustment is generally only possible if shares are sold, even for a nominal amount. The advice given is to file an income tax return in the current year to claim and carry forward the loss for up to eight years, even without current taxable income in India, to be used against future capital gains.

Are the shares traded in market? or any purchaser as on date?

No. This is a private company which fell victim to Covid. Bank also declared NPA due to non payment of EMIs for the loan.

 

Unless you get your shares sold for any meager amount, no loss adjustment possible.

I have a few shares that I am planning to sell to the new owners.

If I sell all my shares can I write off all the amount I invested? If so, can I use this to offset any capital gains from real estate or stocks?

Yes, that is possible.

Thank you. If I sell the shares in this financial year, can I carry forward the loss to future years? I don't anticipate capital gains in this financial year to offset against the losses in the company.

Yes, carry forward of losses to next 8 years is allowed under PGBP & capital gains heads..

Thanks again.

Is it required to file an IT return this year (to take the loss incurred this year) or can I file a return in the year I have capital gains to deduct the loss incurred this year?

I don't file IT return every year as I don't have taxable income in India.

Don't do such mistake. File IT return for the loss claim, before due date.

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