@TeamQuicko If an individual has following earnings in a FY:
1)Business income 3Lakhs
2)LTCG 9.25Lakhs from listed equity shares (taxable @12.5%)
3)LTCG of 6Lakhs from selling commercial property after indexation (Taxable @20%)
I guess govt of india now allowed indexation benefit for properties bought before 23july2024, please correct if i am wrong
4)STCG 5Lakhs from listed equity shares (taxable @20%)
5)Short Term Equity Loss of 8Lakhs from listed equity shares
My questions are :
1)Can he set-off his short term Equity Loss of 8Lakhs from listed shares with LTCG of 6Lakhs arised from selling property (taxable @20%)?
2)if not, then what will be the sequence to set-off this Short term equity loss. Will it be setoff against STCG first or LTCG?
3)Then, What will be his final tax liability?
In Income tax, Short Term capital losses can be set off against LTCG, however, Long term capital losses can be set off only against LTCG. Moreover, LTCL/STCL cannot be set off against any other head of income and the same can be carried forward to future years provided the ITR is filed within the due date. Accordingly STCL of 8 Lakhs will be first adjusted against STCG of 5 Lakhs and remaining 3 Lakhs shall be adjusted against LTCG of 6 Lakhs.
Hope this clarifies. Message me on instagram @fintaxsnippets in case of any further concerns.
No, short-term capital loss (STCL) cannot be set off against long-term capital gains (LTCG) from property. As per income tax rules, STCL can only be adjusted against short-term or long-term capital gains, but LTCG can only be set off against LTCG. It is possible to carry forward STCLs for a period of eight years if they are not used.
Yes, short-term capital loss (STCL) can be set off against both short-term and long-term capital gains, including property gains. However, long-term capital loss (LTCL) only makes sense when compared with long-term gains. It is possible to carry forward unadjusted losses for up to eight years.
No, It is not correct. STCL can be adjusted against both long term and short term gains. But LTCL can only be set off against long term gains, even when the gains are from the sale of property.