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Carry forward of losses

Kalki Vital Narayanam (CA Final Student) (121 Points)

02 September 2016

Can we carry forward loss arising from the sale of Long term equity shares?

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6 Replies

komal choudhary (none) (133 Points)
Replied 02 September 2016

NO SIR.YOU CAN NOT CARRY FORWARD THE LOSSES ARISING FROM THE SALE OF LONG TERM EQUITY SHARES ON WHICH STT HAS BEEN PAID.

Kalki Vital Narayanam (CA Final Student) (121 Points)
Replied 02 September 2016

thanks, can we set-off the long term capital loss (arising from other than shares & Securities)against the profit arising on sale of long term Equity shares on which STT paid?

komal choudhary (none) (133 Points)
Replied 02 September 2016

NO SIR.THAT PROFIT IS EXEMPTED U/S 10(38) HENCE WILL NOT FORM PART OF INCOME.SO YOU CAN NOT SET OFF LOSSES FROM THE INCOME WHICH IS NOT INCLUDED IN YOUR INCOME AS PER IT ACT.

Tanvi (student) (100 Points)
Replied 02 September 2016

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ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 02 September 2016

In case long term capital gain arises on sale of shares and mutual fund as per sec 10(38), Long Term Capital Gains are exempted in the hands of the taxpayer under Section 10(38). However, these gains would be required to be disclosed at the time of filing of Income Tax Returns.

It may be noted that since Long Term Capital Gains are exempted, Long Term Capital Loss shall have no tax treatment and such Long Term Capital Loss can neither be set-off against any income nor be carried forward.

Ram M. Dixit (CA Final (Author)) (376 Points)
Replied 03 September 2016

Any exempt income u/s 10 is not included in the income. Hence loss from equity shares, which inocome is exempt u/s 10(38) is not allowed to be carry forward or set off.