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long Term Capital Loss

Dipak Singh ( company secretary) (58 Points)

28 March 2011

Dear Members,

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

Thanks & Regards.

Dipak Singh

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5 Replies

Maheshkumar Sharma (CA) (134 Points)
Replied 28 March 2011

yes, why not. It is a inter-source adjustement.

only the LTCL cant be adjusted against STCG, even if it is inter-source.

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

Hello Dipak,

As per Section 10 (38) of the IT Act, LTCG on Transfer of Euqity shares on which STT is paid are exempt, the loss incurred by your friend is on the shares of the listed company so it is deemed that STT has been paid. The Provisions also says that if there is any loss on such transaction then it cannot be set off agaist any income.

Thus the loss incurred by your friend cannot be set off against the gain on the sale of shares of the unlisted co.

Other views solicited

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

LTCL AGAINST LTCG ...........

Dipak Singh ( company secretary) (58 Points)
Replied 28 March 2011

Dear Ravi & Maheshkumar ,

I would like to clear it more that listed Company Shares were sold off line i.e they were sold on Physical Shares basis due to inter family settlement , so there is No STT is Paid.

Thanks & Regards.

Dipak Singh