Tuesday, February 2, 2010

SET OFF LONG TERM CAPITAL GAIN AGAINST SHARE INCOME


on Tuesday, February 2, 2010


I have some Long Term Capital Gain (LTCG) from sale of a plot.

Kindly advise whether



  1. Long term capital loss from sale of shares and mutual funds (STT paid) can be adjusted against the LTCG from sale of plot.


  2. Short term and Long term capital loss on sale of shares and mutual funds (STT paid) can be adjusted against income from salary and interest also.

  3. Short term capital loss from sale of shares and mutual funds (STT paid) can be adjusted against the LTCG from sale of plot

R K Sehgal
Dear Sehgal Ji.

Rules about Adjustment /Set off of Capital Gain Is given Here under

  1. Intra(with In) Head Adjustment: Long term capital Gain loss can be adjusted against Long Term capital gain Only.
  2. Inter(with other) Head Adjustment:Loss Under capital Gain Head Can not be adjusted against any other head.
From the Above two rules net result comes as that

  • Capital loss can not be adjusted against any other head whether salary ,Business & profession,House Property,Income from other source.
  • Long term capital gain loss can not be adjusted against Short term capital gain however Short term capital loss can be adjusted against both Long term capital gain and Short term capital gain.
Now point wise Answer To your queries is Given hereunder.


  • can Long term capital loss from sale of shares and mutual funds (STT paid) be adjusted against the LTCG from sale of plot???
As per Common rules given above one can easily interpret that It can be done but correct answer is we can not adjust long term capital gain loss from sale of shares(STT paid) with LTCG from sale of plant.The reason is that as the Long term capital Gain from Shares(STT Paid) is exempted from tax so Long term capital Loss from Sale of shares ,Being exempted income u/s 10(38),can not be adjusted against any other Long Term Capital gain.So You can Not adjust Long term capital loss From sale of shares and mutual funds (STT paid) from LTCG from sale of plot.


  • Can Short term and Long term capital loss on sale of shares and mutual funds (STT paid) be adjusted against income from salary and interest also??
As per general Principal Capital gain loss can not be adjusted against any other Income .Moreover with head also Long Term capital loss can be adjusted against long Term capital only so

  1. Short term capital Loss can not be adjusted (any type, including short term Loss from sale of shares and Mutual funds,stt paid))against any other Income Head i.e salary,Business & profession ,House Property ,Income from other source.
  2. Long capital Loss can not be adjusted (any type) against any other Income Head i.e salary,Business & profession ,House Property ,Income from other source.Further Long term Loss from sale of shares (STT paid) ,being exempted Income u/s 10(38),can not be adjusted against Long Term Capital gain from any other source.but If shares are sold without STT paid then Long term Capital loss From shares can be adjusted against the LTCG from any other source.(read Full details)
  • Can Short term capital loss from sale of shares and mutual funds (STT paid) be adjusted against the LTCG from sale of plot ??
As per the general rule the Short Term capital loss can be adjusted against STCG or LTCG .Moreover in act there is no seprate treatment for set off for loss from short term shraes has been given so in my opinion Short Term loss from shares (stt ) paid can be adjusted against Long term Capital Gain from any source or short term capital gain from any other source and in your case it can be set off against the long Term capital gain From Plot.

comments invited.


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