@Surbhi_Pal @Shrutika_Shah is it necessary to set off long term capital losses from earlier year in subsequent years
Example - In “year 1” if I had long term loss of 5lakh and in “year 2” I had long term profit of only 2lakh, then: (my questions are related to LTCG on sale of shares or securities)
Q1- Is it necessary to set this gain of 2lakh from the loss of 5lakh or it can be deferred.
Q2- If it can’t be deferred then while setting off the losses against gains how we will deduct the 1lakh exemption on profits made on LTCG, will it be first deducted and then losses will be settled off or vice versa
Hey @Walker,
If those are brought forward losses, they will be adjusted against the gains. Unfortunately, it is not a choice.
Moreover, first the losses are settled and then the exemptions are allowed.
Hey @Walker,
If those are brought forward losses, they will be adjusted against the gains. Unfortunately, it is not a choice.
Moreover, first the losses are settled and then the exemptions are allowed.
@Surbhi_Pal you told that first the losses are setoff and then they exemptions are allowed but as I was researching about it, I got to know that while computing total income first the exceptions or deductions are taken and then the losses are setoff, can you please clarify, I am also attaching a screenshot for reference
@Surbhi_Pal could you please reply
Hi Divya - while this makes sense to me, how does one interpret the caveat that to claim section 111a concessional rate, STT must be paid both on purchase & sale of security (while in an IPO allotment, there is obviously no STT paid on purchase)> I know for Long term CG there is exemption 10(38) for IPOs, but what about short term CG, can we still claim concessional rate despite not having paid STT on purchase/allotment of share pre-listing?
Hey @kul
As per the notification issued by the government, you can still claim the concessional rate on short-term capital gains from shares acquired through an IPO, even though no STT was paid at the time of allotment, as long as STT is paid on the sale.
Hope this helps!
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This is my question what section/provision/exemption/notification exactly states this- since the rule says STT needs to be paid on purchase and sale of securities to claim section 111A concessional rate
Hi @kul
Please refer section 111A (a)&(b)
Sorry was this an answer? That’s exactly my question. Section 111A clearly states purchase and sale of securities needs to have STT paid for it to be eligible for concessional rate then where in the tax code does it justify IPO allotted shares (no STT paid here on purchase) are also eligible for concessional rate of 15%?
Hey @kul
Section 111A (1) (a) & (b), specifies that STT is to be paid at the time of selling securities, without mentioning any requirement for STT payment at the time of purchase. Therefore, you can avail the benefit of the concessional rate when selling shares acquired through an IPO. Attached here screenshot for your reference.
This is exactly the comfirmation I was looking for - thanks so much
Hey @Walker
Exemptions or deductions directly related to income, such as the Section 54 exemption, will be applied first to your income. Afterward, the current year and previous years’ carry forward losses will be adjusted. Once these adjustments are made, deductions under Chapter VI-A, like Mediclaim premiums and LIC premiums, will be applied to your remaining income.
Hope this clarifies!