If I ‘m having STCL u/s 111A (i.e. transaction in which STT had been paid) & STCG on land (or any other asset on which STT need not be paid), then can I set off that loss against STCG on Land?? & if we can not set it off, then for how many years can we carry Forward that Loss to be set off against STCG u/s 111A? Pls Inform soon.Pauravi, Mumbai
Set off of loss from one source against income from another source under the same head of income is dealt in section 70 of the I T Act . Subsection 2 of this section deals with "short term capital loss. The wordings are as under
(2) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short-term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset.
Language is very clear. Short term loss on one kind of capital asset can be set off with capital gains of any other capital asset. It means that there is no distinction between types of capital asset. So short term capital loss on share can be adjusted with short term or long term gains on any other income.
Carry forward of STCL
Carry forward of loss under capital gains is delat in section 74 of the I T Act.
74. [(1) Where in respect of any assessment year, the net result of the computation under the head Capital gains is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and
(a) in so far as such loss relates to a short-term capital asset, it shall be set off against income, if any, under the head Capital gains assessable for that assessment year in respect of any other capital asset;
(b) ...............
(c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.]
(2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.
So, the carry forward of short term capital loss shall be up to 8 years and it can be adjusted with any kind of capital gains.
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