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CONFUSION REGARDING THE LTCL ON SHARES???????

darshita (artilce student) (72 Points)

17 March 2010

THE ACT SAYS THAT THE LTCL CAN BE ADJUSTED AGAINST THE LTCG, BT THE ?? IS HOW THE LTCL ON SALE OF SHARES BE ADJUSTED AGNST THE LTCG ON SHARES,AS IT IS ALREADY EXEMPT??SO CAN THE LTCL ON SALE OF SHARES BE SET-OFF AGAINST THE LTCG ON OTHER CAPITAL ASSET.??????????

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11 Replies

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 17 March 2010

The Act Says That Long Term Capital Loss Can Be Adjust Again LTCG........It Means That If It Taxable Then Set Off is Given......

N If LTCG is Exempt.Then Question of Setoff Does Not Arise........

N LTCL on Shares (If STT paid).Then Can't Be Setoff Against LTCG on Capital Asset........

It Means That LTCG Arises ( IF STT Paid) Then Should Not Consider For Computation for Loss or Profit Whatever May Be.

1 Like

CA Babit Khurana (learning is my passion) (338 Points)
Replied 17 March 2010

Yes darsh*ta you can adjust share trading LTCL with any LTCG, there is no any restriction made in the ACT, as per circular no:-721/13.09.95 any loss detrmined under any other head can be set-off against LTCG.

Conclusion:- You Can set off LTCL with any LTCG this is not against the law.

1 Like

Amir (Learner) (4016 Points)
Replied 17 March 2010

Dear Darsh*ta,

LTCG on sale of Shares is exempt u/s 10(38) if STT is paid at the time of sale.

Now Loss from above transactions will be a dead loss n the same cannot be adjusted.

But Yes, Long term Capital loss on sale of shares which is NOT Exempt u/s 10(38) CAN BE ADJUSTED/ SET OFF WITH OTHER CAPITAL GAINS.

1 Like

Rohan (CA Finalist) (359 Points)
Replied 17 March 2010

Darsh*ta,

As income from LTCG on securities is exempt as per 10(38), one cannot use the LTCL on sale of securities to set off Capital Gains on any other LTCG (assuming STT paid). Any long term loss on securities is a dead loss.

However, if one disposes securities without paying STT then LTCL becomes at par with any other LTCL/LTCG and can be set off. This is the only bit of tax planning which can be done using LTCL on shares, i.e.,selling without paying STT.

Thank you.

1 Like

Dhruva Hegde (Chartered Accountant) (230 Points)
Replied 17 March 2010

Since it is fully exempt u/s 10(38) u can not claim or deduct any loss suffered , expenditure incurred on these while calculating taxable income.

1 Like

dharmistha (ca final) (34 Points)
Replied 17 March 2010

the act says that if any income is exempt from tax, the loss or expense under the same can not be set off. so in your question loss can not be set off.

Prasanth Nair V (ACA,ACS,CWA Final,Mcom) (557 Points)
Replied 18 March 2010

No Doubts that u can Set of the LTCL arising out of shares with any other LTCG, not the one which is Exempt from Tax...

1 Like

C.Balaji (Learner) (1867 Points)
Replied 18 March 2010

Dear Darsh*ta...............

Agree with Amir bhai........

LTCG on Sale of Shares - Exempt u/s 10(38) if sale is routed through Stock Exchange and STT is paid...................

Loss from above transactions cannot be adjusted against any income......

Long term Capital loss on sale of shares not exempt u/s 10(38) can be set off against LTCG......

1 Like

CA Trinath Galla (student) (3130 Points)
Replied 18 March 2010

Originally posted by : dharmistha
	hi the act says that if any income is exempt from tax, the loss or expense under the same can not be set off. so in your question loss can not be set off.

Raj Kumar (Senior Manager) (21 Points)
Replied 13 May 2010

Originally posted by : dharmistha
	hi the act says that if any income is exempt from tax, the loss or expense under the same can not be set off. so in your question loss can not be set off.