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Long Term Capital Loss

Dipak Singh ( company secretary) (58 Points)

28 March 2011

Dear Members,

One of my friend sale 4500 shares of listed Comapny at loss of1250 and he also sale 6500 shares of unlisted Company at gain of 3000 . My question is whethre he can set off long term capital loss of 1250 with long term capital gain of3000,

Thanks & Regards.

Dipak Singh

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10 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 28 March 2011

Yes. Long Term Capital Loss can be set - off against Long Term Capital Gain.

Regards,

Devendra

Sravanthi (CA Final ICWA Final & M.B.A) (737 Points)
Replied 28 March 2011

yes u can. Long term capital loss can be set off only with Long term Capital gain

Regards

CA Final (CA Final Student) (856 Points)
Replied 28 March 2011

Of course ... u can set off

Ravi Dasija (C.A. ) (273 Points)
Replied 28 March 2011

But how it can be possible, as LTCG on sale of shares of listed company are exempt, so how can the loss on sale of such shares can be set off even it being an interhead set off????????

Navina (Artical) (64 Points)
Replied 29 March 2011

I thing ravi is right because long term capital gain on share of listed company is exempt u/s 10(38) if STT paid on the transaction and exempt income loss can not be set off and can not be carried forward. Therfore Listed company long term capital gain can not be sett of against profit of unlisted company long term capital gain.

CA.Pravinchandra (Executive (F&A)) (2387 Points)
Replied 29 March 2011

Originally posted by : Navina R. Mhashelkar
	I thing ravi is right because long term capital gain on share of listed company is exempt u/s 10(38) if STT paid on the transaction and exempt income loss can not be set off and can not be carried forward. Therfore Listed company long term capital gain can not be sett of against profit of unlisted company long term capital gain.

100% agree with Navina.

pujesh (article) (27 Points)
Replied 29 March 2011

yes you can set off the gain

but u hv to be file the return in time

as per the income tax provision all gain frm listed co. is exempt provided terms should be fulfiled

PRATEEK (ACA) (102 Points)
Replied 29 March 2011

DEAR FRIENDS,

I WOULD LIKE TO BRING TO YOUR NOTICE THAT IF THE LOSS ON ACCOUNT OF SALE OF LISTED SHARES ARE SHORT TERM THEN ONLY HE CAN SET OFF AGAINST THE PROFIT ON SALE OF UNLISTED COMPANY. LONG TERM CAPITAL LOSS OF LISTED COMPANY SHARE CANNOT BE SET OFF BECAUSE THEY ARE EXEMPT U/S 10(38).THEREFORE IF A GAIN AMOUNT IS EXEMPT THEN IN THAT CASE LOSS AMOUNT WOULD ALSO BE EXEMPT.

Vijay Chauhan (Accountant) (21 Points)
Replied 30 July 2011

Dear Sir ,

can v froward capital loss from listed share (long term )

Hari Wadhwa (CA in Practice) (485 Points)
Replied 28 October 2011

Dear Dipak

Pls read through the following link (my post) : -

/forum/long-term-shares-173521.asp

plus

Conclusion: -

1) As per the provisions of Income Tax Act, Long term Loss on sale of shares of a listed company sold through recognised stock exchange on which STT has been paid are NOT ALLOWED to be set off against ANY INCOME. Thus, you can not set it off against the LTCG generated on sale of Unlisted shares.

2) Other points for your knowledge only: -

a) LTCG on sale of shares of unlisted co are allowed to set off & carry forward

b) STCG on sale of shares are allowed to set off & carry forward IRRESPECTIVE OF PLATFORM OF SALE (i.e, whether shares are sold through recognised stock exchange or otherwise)

c) Shares held in DMAT A/c can be sold thorogh a mode other than stock exchange also

d) similarly, shares (of a listed co.) held in physical form (i.e, not in DMAT form) can also be sold through stock exchange.

For case (c) & (d) supra: -You can plan as per your case of computation & accordingly decide whether to sell your shares on different platforms (offcourse after conversion in mode of holding) (i.e, through stock exchange or otherwise) irrespective of mode of shares held (i.e, whether in DMAT or otherwise).....it all depends whether you need loss to set off or not.