INCOME TAX

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  1. MANDEEPBINNY

    MANDEEPBINNY New Member

    I SOLD A PROPERTY On 10 nov2014 and incurred a long term capital gain and invested the proceeds in long term capital gains fd. So now In 16-17 I invested in a flat 0n 10 th April and sold the same flat in May this year only and incurred short term capital losses So can I offset long term capital gains in 14-15 against short term capital losses in the year 16-17 while filling the tax return for the year 16-17? PL GIVE ME THE DEATILS REGARDING ALL THE TAX IMPLICATIONS.
     
  2. ZED

    ZED Well-Known Member

    But there can not be a short term capital LOSS. There would be gain only (except for one theoretical case)

    This means capital gain accrued in the financial year 14-15. It appears you claimed exemption from such capital gain u/s 54.

    This means you did not hold that new asset for a period of 3 years, which is required if you want to claim exemption u/s 54.



    Relevant extracts of S.54 for your consideration.
    (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or

    (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.



    Let's see this with an example posted at income tax site

    upload_2016-5-29_13-17-55.png

    upload_2016-5-29_13-18-31.png

    upload_2016-5-29_13-20-2.png

    upload_2016-5-29_13-21-17.png


    upload_2016-5-29_13-20-53.png


     

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