I have a client who is required to file return in form ITR-3 as he has professional income. He sold his residential flat during the year. He is resident in India and the flat was purchased during April 2008. On calculating cost of acquisition after indexation, he has a loss on sale of flat. He has capital gains on other transactions such as sale of shares, mutual funds, etc. The Excel utility of ITR-3 has given him benefit of indexation and not computed his tax liability at 12.50% on absolute capital gains. However, it has also not allowed him to set off his capital loss on sale of flat against other capital gains, nor allowed it to be carried forward to future years. As a result, he has to pay tax on other capital gains received by him without loss on sale of flat being set off.
My query is - is this the intention of law not to allow set off or carry forward of loss computed based on indexed cost of acquisition or Excel utility has made an error, so that I will raise a grievance from the client's Income tax login?
CAclubindia
