Carry forward Capital Loss to future years

As per IT rules, the following are allowed

- Capital Gains (whether Long or Short Term) can be used until Taxable Limit of 2.5 Lakhs

- 1 Lakh of LTCG per year is exempt from tax

- LTCL can be set off only against LTCG, STCL can be set off against STCG or LTCG

Please consider the following two cases - CASE 1 and CASE 2 - where the STCG or LTCG within taxable limit is used or LTCG exemption 1 L per year is used to make the tax = 0 as per the Income Tax rules.

 

CASE 1

CASE 2

STCG

2 Lakhs

0

STCL

0

0

LTCG

0

3 Lakhs

LTCL

0

0

Other Income

50K

50K

Gross Income

2,50,000

2,50,000

(After 1L LTCG exemption)

Tax

0

0

Now consider the following 2 cases - CASE 3 and CASE4, where my income consists of only

Other Income of 50,000

STCG and STCL in the same year or

LTCG and LTCL in the same year

 

CASE 3

CASE 4

STCG

2 Lakhs

0

STCL

1 Lakh

0

LTCG

0

3 Lakhs

LTCL

0

2 lakhs

Other Income

50K

50K

Gross Income as per ITR

1,50,000

50,000

(After 1L LTCG exemption)

Tax

0

0

What I require

Gross Income of 2,50,000

 

 

 

Carry forward  STCL of 1 L for set off in future years

Gross Income 2,50,000

(LTCG 2L + Other 50K with 1 L LTCG exemption)

 

Carry forward LTCL 2 Lakhs for set off in future years

 

In these cases,in the ITR Form or ITR utility the following thing happens automatically, on which we have no control

STCL gets fully used up by Intra Head set off of STCG in the same year

or

LTCL gets fully used up by Intra head set off of LTCG in the same year.

However I want to use the STCG and LTCG until the taxable limit and still pay no taxes and carry forward the STCL and LTCL to future years for set off.

Currently this is not allowed by the ITR form or ITR utility ( Or at least I do not know the method by which this can be done )

The only way I can do this is by declaring  my STCG and LTCG under Other Income so that I can carry forward the losses STCL and LTCL.

If I am missing something can some one tell me how the declarations or entries can be made in the ITR so that I use the STCG and LTCG within taxable limit and carry forward the STCL and LTCL?

 

Replies (1)

The act has specified some procedure for sett off of losses, which are to be followed.

You cannot override them.

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