Can I set off F/O losses against capital gains?

Income Tax Income from Business or Profession
103

Hi @VikrantAgarwal

In this case, your loss of Rs. 2 lakh will be adjusted against your LTCG if Rs. 1.3 lakhs, and the balance amount of 70,000 will be carried forward.

104

Can I offset Business income(FNO profits) with short term capital losses?

105

Hi @Kondalarao_V

Profit from FnO trading is considered a non-speculative income. As per the Income Tax Act, short-term capital loss (STCL) can only be adjusted against STCG & LTCG.

Hence, you cannot adjust/set off STCL aginst business income (FnO profit).

Hereā€™s an article for your reference on Set Off and Carry Forward of Losses under Income Tax - Learn by Quicko

Hope this helps.

106

Hi There,
Two questions:
1- I have gains from US (<1 year investment time) and some losses in F&O in India. Can these gains (from US) and losses (from F&O) be combined?
2- Can I include short term gain from US (<2 Yrs) in presumptive tax filing (which allows 6% taxation) in India?

Thanks,
Vishal

107

Hi @vishal_singh

Here are the answers to your questions.

  1. Income from the sale of foreign shares is a Capital Gains Income as per the Income Tax Act. Hence, yes, you can set off your US gains against the FnO losses in India if both events have occurred in the current year.
    Hereā€™s a read on Tax on US Equity in India - Learn by Quicko for your reference.

  2. If short-term gains can be reported as business income depends on the intent of the trader. If the intent was doing trading and not investing then it can be reported under Income from Business and Profession and if the turnover is under the specified limit then you can opt for presumptive scheme taxation as well.

Hope this helps!

108

Hi, I have also received demand notice for setting off current year normal business loss against first from capital gain and then from other sources.
what is current year business loss set off order? ur article is not helpful in this matter. can u plz provide specific advice with proper supporting?

susma
susma886Ɨ693 119 KB

109

Hi @CA_ABHISHEK_PODDAR

Section 115BBE is for tax at a special rate on income. As per the snippet attached by you, we can see that ITD is demanding tax on income chargeable under section 115BBE and could not find anything related to the set off of loss.

Hope this helps.

110

i have Short Term Capital Loss in shares.
Can we Reconcile it with STCL Against LTGC.

111

Hi @Aadil_Nakhwa,

Yes, you can set off STCL i.e. short-term capital loss against short-term capital gain (STCG) as well long-term capital gain (LTCG).

Hope it helps.

112

I trade in F&O both Intraday and overnight position. I do not have any other income and trade from home.

I want to start a retail business and I have some question regarding taxes.

  1. If I lease commercial retail property for retail business and if I do not make profit from that business, can I deduct all the expense (i.e. rent, employees salary, electricity bills) from my F&O income profit for that particular financial year?

  2. F&O Intraday and overnight position both are consider non-speculative income. right?

113

Hi @Private

  1. Income from F&O Trading & Overnight Trading is a non-speculative business income
  2. Income from Intraday Trading is a speculative business income

Retail business is considered a non-speculative business. As per the Income tax rules for carry forward and set off of losses, there can be inter-head set off of losses. So, profit from only FnO & Overnight trading can be set off against retail business as both are non-speculative business incomes.

Read more about Set Off and Carry Forward of Losses under Income Tax - Learn by Quicko

Hope this helps!

1 Like
114

if trade in f&o is done intraday ; then ; it is ; speculative or non-speculative ?

@Shrutika_Shah
@Muskan_Balar

115

that was my question. I think both consider as non-speculative income.

116

@HIREiN

I think itā€™s non-speculative.

117

my confusion is :

is compulsory to adjust the loss ?
suppose . say .eg.
i donā€™t want to adjust the loss this year because my income this year falls below 2.50 lakhs .
so ,
i decide to carry forward the loss this year .
and shall decide next year whether to adjust the Long Term Capital Loss against Long Term Capital Gain.

can i do that ?

@Shrutika_Shah @Muskan_Balar @Bharti_Vasvani

118

Hi @HIREiN,

You can carry forward the losses up to the next 8 financial years from the year in which the loss was incurred.

Hope it helps.

119

yes . i know that .
but . my query is :
i can adjust the loss in any of these 8 years as per my will ? am i right ?

120

Yes, you can do that. If you donā€™t want to set off losses this year and carry forward to next year, it is possible as per your stated case. Make sure you have the eligible income source to set off those losses.

121

Hello @HIREiN,

It is mandatory to show/report the losses to carry forward to next year, though the income is less than 2.5 lakhs if the losses are getting set off against your income, you need to set it off first. If the losses are not setting off then it will automatically get carried forward but you wonā€™t get an option if you donā€™t want to set off this year but have to do it next year.

Hope it clarifies your query.

122

Hello,
My friend purchased a house in May 2011 for 21,00,000 INR.
He sold the house in June 2023 for 30,00,000 INR.

Cost Inflation Index in May 2011 = 184
Cost Inflation Index in June 2023 = 348

Indexed cost of acquisition = 21,00,000 x (348/184) = 39,71,730

Sell consideration - Indexed cost of acquisition
= 30,00,000 - 39,71,730
= - 9,71,730

Does this mean he can book a capital loss of 9,71,730 INR and can offset it against capital gain?

Thanks in advance for your inputs.