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[Section 74] : TREATMENT OF CAPITAL LOSS

 

Set off. Short term capital loss can be set off from either Short Term Capital Gain or Long Term Capital Gain.

Long tenn capital loss can be set off only from Long Term Capital Gain.

Carry forward. Unadjusted capital losses are carried forward separately for 8 succeeding previous years to be set off in following manner

(a)        Short term capital loss can be set off from either Short Term Capital Gain or Long Term Capital Gain.

(b)       Long Term Capital Loss can be set off only from Long Term Capital Gain.

(c)        Loss on transfer of long term equity shares (Subject to 577’). Long term capital gain on transfer of shares (which are subject to STT) is exempted u/s 10(38) and so loss on transfer of long term shares cannot be set off against any other long term capital gain and hence such a loss is ignored.

Adjustment of loss on sale of securities or units [Section 94(7)]

(a)       Any person buys or acquires securities or any units within a period of three months prior to the record date;

(b)       Such person sells or transfers

(i)         such securities within a period of three months after such date, or

(ii)        such unit within a period of nine months after such date;

(c)        The dividend or income on such securities or units received or receivable by such person is exempt.

(d)       The loss, if any, arising to him on account of such purchase and sale of securities or units shall be ignored up to the amount of income exempted under (c) above. Such loss shall not be allowed to be set off or carried forward up to the amount of income exempted under (c) above.

For the above purposes  :

  1.  The “record date” means such date as may be fixed by a Company, Mutual Fund or UTI for the purposes of entitlement of the holder of such securities to receive dividend or interest.

(ii)        The term “Securities” shall include stock and shares.

(iii)       The term “UNIT” shall have the same meaning as is assigned to it u/s 115AB.

Deemed cost of units acquired within a period of three months prior to the record date [Section 94(8)]

(a)       Any person buys or acquires any units within a period of three months prior to the record date

(b)       Such person is allotted additional units without any payment on the basis of holding of such units on such date

(c)        Such person sells or transfers all or any of the units referred to in clause (a) within a period of nine months after such date, while continuing to hold all or any of the additional units referred to in clause (b), then, the loss, if any, arising to him on account of such purchase and sale of all or any of such units shall be ignored for the purposes of computing his income chargeable to tax and notwithstanding anything contained in any other provision of this Act, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such additional units referred to in clause (b) as are held by him on the date of such sale or transfer

For the above purposes the “record date” means such date as may be fixed by a Company, Mutual Fund or UTI for the purposes of entitlement of the holder of such securities to receive dividend or interest.

 
More Topics ... @ ' Capital Gain'

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]

Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
DEEMED CAPITAL GAIN [Section 47A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain
Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain
 TREATMENT OF CAPITAL LOSS [Section 74]
TAX ON CAPITAL GAINS

 
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