Hi Buddy,
I am a tax consultant. During my service period, I have noticed that often people are confused about how to carry over capital losses? Hence, today I would like to share my thoughts about the same.
Verify your legal documents for property verification and scrutiny from the NoBroker legal assistance service Purchase the home of your dreams. For experienced assistance, look into the NoBroker Buyer programmes. Are you looking to sell your home? Get leads and more with NoBroker Seller Plans.When calculating capital gains, if the sale proceeds from the capital asset are less than the cost of acquisition (whether indexed or not) and transfer charges, you will have a capital loss rather than a capital gain.
Let's have a look at how capital losses are handled.
Losses from capital gains cannot be offset against income from other heads under the Income Tax Act; they can only be offset within the 'Capital Gains' head,
Only Long Term Capital Gains can be used to offset Long Term Capital Losses
Short-term capital losses can be deducted from both long-term and short-term earnings
If you are unable to set off your whole capital loss in the same year, both short and long term losses can be carried forward for an additional eight assessment years following the year in which the loss was originally computed.
If a business has had capital losses, these losses can be carried forward, and the business does not have to continue.
Treatment of Shares and Equity Funds with Long-Term Losses:If you sold shares or equity mutual fund units after 31.3.2018 and sustained a long-term capital loss, you can deduct it from any LTCG. Profits or gains on long-term shares or equity funds that exceed Rs.1 lakh are now taxable.
You can also carry these losses forward for up to 8 assessment years to set off later. There was no tax on long-term gains on shares and equity funds prior to 31.03.2018, hence long-term gains on shares and equity funds were regarded as a dead loss. As a result, the same was not permitted to begin or continue.
When held for more than a year, stocks and equity funds are considered long-term capital assets.
Filing a Return is RequiredTo keep track of your losses, the Income-tax department has stated that losses from one year cannot be carried forward unless the return for that year is filed before the deadline.
Even if it's a loss return and you don't have any revenue to declare, you should still file your return by the deadline.
I would like to conclude my answer about how to carry over capital losses. I hope this helps:)
Read More:
What Is The Surcharge On Capital Gains Tax? How to set off a short-term capital loss?Your Feedback Matters! How was this Answer?
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How to Carry Forward Capital Losses?
Tina
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2022-05-16T12:41:32+00:00 2022-05-27T17:53:03+00:00Comment
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