SHAHAD (CA Final) (75 Points)
21 November 2011Hi all,
I have one question?
An individual having long term capital loss for the current year ( Share Trading).
Also his wife having long term capital gain arising out of transfer of land in her name.
Can we set off wife's LTCG with Husband's LTCL and reduce the tax liability.
Thanks
Z
( )
(2960 Points)
Replied 21 November 2011
They both are to be taxed individually , so NO
Also the loss is from share trading ,
So assuming security transaction tax has been paid and the shares are equity shares or unit of equity oriented Mutual fund . NO SUCH LOSS CAN BE ADJUSTED AGAINST INCOME UNDER ANY OTHER HEAD
sec 10(38) exempts the LTCG on above shares and unit
Further loss from a source which is not taxable can not be adjusted against income under any head.
If you want to save tax of the assesse who sold land
you can claim exemption u/s 54 EC (investment in NHAI or RECL ) within 6 months from date of transfer or date of filling the return u/s 139(1)
the max. amount is rupees rupees 50,00,000 in a financial year
ONLY LAND IS SOLD?
In addition you can go with exemption u/s 54F (purchase or construct a house property provided you do not have more than one house property EXCLUDING THE NEW PROPERTY ) . In case any asset other than residential property is purchased
If you had purchased property 1 year before the date of transfer then also you can claim exemption to the extent of amount LTCG or actual amount whichever is lower
(Other requirements of aforesaid sections are also to be fulfilled)
Suraj Agarwal
(Self Practitioner in Income Tax & GST)
(782 Points)
Replied 21 November 2011
NO, we cannot set off wife's LTCG with Husband's LTCL and reduce the tax liability.
CAclubindia
