Fire your tax related queries and i would get it solved!!!

[magnet]

I am confused that how Long term capital Loss is Tax free ? it's upto me to claim or not .
my querry is if we may carry forward the Long term capital loss like short term capital loss to next year or not.
should we square off the loss in same year with the capital ?

DIOSYS please comment to my querry

Good brother can you please explain with what respect you asking the question.

As the answer depends on that.

If its with respect to shares(delivery basis).

Than as we know long term capital gain if arised after 1 year of held the share will be tax free.Now since we don't pay tax on profit we make on the shares the government also doesn't provide any rebate that they will set-off losses from shares hold from long period.

Yes short term capital loss can be set off only with short term capital gains (only wrt shares no other short term gain from property etc etc).

But if you talking with respect to property or in business you make long term loss than yes it can be set-off and can be carry forward for 8 years.

Diosys sir will explain but looking at present events i dont see him much online.If you go through all over this topic somewhere you will get the answer.

But make sure you check the date of the post as the laws keep changing every year.

 

[raghavv]

Hi Diosys,
Thanks for your reply. Your return to this very useful forum has given it second life. In connection with my query, the shares mentioned were purchased many years ago by IPO route, and allotment letters for the same are not traceable. But they were dematerialised about ten years ago and all the statements of demat holding since then are available. On the basis of statements of demat holding, can't it be presumed that these shares are being held for atleast ten years ? Afterall, from income tax point of view, a period of holding over one year is enough for it to be called long-term. So, in the absence of allotment letters, can the statements of demat holding be used as a proof of it being a long-term holding? Please answer.

 

[magnet]

Hi Diosys,
Thanks for your reply. Your return to this very useful forum has given it second life. In connection with my query, the shares mentioned were purchased many years ago by IPO route, and allotment letters for the same are not traceable. But they were dematerialised about ten years ago and all the statements of demat holding since then are available. On the basis of statements of demat holding, can't it be presumed that these shares are being held for atleast ten years ? Afterall, from income tax point of view, a period of holding over one year is enough for it to be called long-term. So, in the absence of allotment letters, can the statements of demat holding be used as a proof of it being a long-term holding? Please answer.

Yes you can always state you got it way back.SInce there wont be any entry in your pass-book to reflect the same.

Also if there is any scrutiny for related issue.you can always forward the scrutiny letter to the company registrar to extract detail when was the share actually allotted to you.

But just for the sake to be on safe side dont try to try to extract this detail now as it will be a cumbersome waste of time task.Only if in future any issue comes up.

FOr time being just mention old investment and pray you dont receive any notice related to same.95% of the time it never comes.

 

[diosys]

dear magnet
Thanks for your above reply to my querry
"it means STCG and LTCG are two different heads . if I have Long Term capital loss then it will be setoff with Long Term capital gain in same year or carried forward next year for set off in 8 years .

similar will be case with Short term capital Gain/Loss

both these may be carried forward in respective heads for 8 years for set off. "

I am confused that how Long term capital Loss is Tax free ? it's upto me to claim or not .
my querry is if we may carry forward the Long term capital loss like short term capital loss to next year or not.
should we square off the loss in same year with the capital ?

DIOSYS please comment to my querry

Dear GB,

It is defined in the act that loss from any source whose income is tax free would also be capital loss. Under the provisions of IT act it is not your choice to set off or not...It is mandatory to be done. You would need to set off your long term capital loss with long term capital gain ONLY. Long term capital loss cannot be set off against short term capital gain (since it is taxable).

 

[diosys]

Hi Diosys
thanks for your reply.
but pls. clear my confusion. whether i have to pay no tax for for my long term capital gain? if no, then as my regular bsn. is share trading so, can i show my long term income as bsn. income and set off with loss.
pls. reply soon.
raja

I think you are confused between LTCG and business income difference. I would strongly suggest to read the first page of this thread in order to understand yourself once.

 

[santosh k parakh]

hello,

i wish to know about share or stock borrowing/ lending mechanism between individuals ,
incase it is permitted what sort of agreement should i enter into while lending the stocks to a inividual. and retain the ownership of my holding as i am not selling it but lending it for his collateral purpose to get the exposure in fao trading
and also wish to know how would the income from from stocks lending be treated as per as ITax is concerned

 

[drywater86]

I would like to know the calculations of short term tax and long term tax ??

How exactly the calculation should go ?

Can you please suggest with proper examples.

Thanks.

 

[goodbrother]

Dear GB,

It is defined in the act that loss from any source whose income is tax free would also be capital loss. Under the provisions of IT act it is not your choice to set off or not...It is mandatory to be done. You would need to set off your long term capital loss with long term capital gain ONLY. Long term capital loss cannot be set off against short term capital gain (since it is taxable).

Dear diosys

Thanks for clearing all my doubts .

GB

 

[diosys]

hello,

i wish to know about share or stock borrowing/ lending mechanism between individuals ,
incase it is permitted what sort of agreement should i enter into while lending the stocks to a inividual. and retain the ownership of my holding as i am not selling it but lending it for his collateral purpose to get the exposure in fao trading
and also wish to know how would the income from from stocks lending be treated as per as ITax is concerned

such lending transaction if is a one off transaction should be shown under income from other sources otherwise if it is a regular feature then under business income.

 

[diosys]

I would like to know the calculations of short term tax and long term tax ??

How exactly the calculation should go ?

Can you please suggest with proper examples.

Thanks.

Please take some pains and go through this thread.... Have been explained many times