• LTCG & setting off LTCG with trading losses

Dear Sir/Madam , 

I had purchased Equity Mutual funds in 2004 and sold them in FY18-19 . 
Will i incur LTCG on them ? 
I had done F&O trading in FY 2018-19 and had losses in them. Can the above mutual fund gains be offset against Trading losses from F&O .
Asked 4 months ago in Income Tax from Mumbai, Maharashtra

Yes if the selling price is high you will have ltcg u/s 112A.

Yes such loss can be set off against capital gain income.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
2291 Answers
19 Consultations

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- The rule for taxation of LTCG has been changed in 18-19 w.e.f 01.02.2018. Up to Rs.1 lac gain there is no tax. You need to check when you had sold the mutual funds. If the gain is more than Rs.1 lacs then it can be set off against F&O losses. To claim F&O losses, you need to get the tax audit.

Vivek Kumar Arora
CA, Delhi
3221 Answers
166 Consultations

5.0 on 5.0

Dear Sir/Madam

 

Long-term capital gains (LTCG) on non-tax saving equity funds of up to Rs 1 lakh are tax-free in your hands.  LTCG in excess of Rs 1 lakh is taxable at the rate of 10% without the benefit of indexation. Government introduced this in Budget 2018.

 

For f &o Trading plz share you are frequently deal or occasionally 

Lalit Bansal
CA, Delhi
637 Answers
41 Consultations

5.0 on 5.0

Hello,

 

Yes, it would be liable for LTCG.

Long-term capital gains on the sale of Equity shares/units of Equity oriented Fund is leviable if the gain is more than Rs 1 lakh at @ 10% without the benefit of indexation.

 

If your LTCG is more than Rs. 1 Lakhs, then it can set off from the loss of F&O Trading business. To claim loss from F&O Trading Business you need to get your accounts audited.

 

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1136 Answers
3 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

The holding period of mutual fund units can be short-term or long-term. In case of equity mutual funds and balanced mutual funds, a holding period of 12 months or more is regarded as long-term. So, long-term capital gains tax or LTCG applies to those investments. A holding period of 36 months or more is regarded as long-term for debt funds.

 

Yes, the gain would be treated as long term capital gain. The new tax is applicable only on amount of capital gain exceeding Rs. 1 Lakh.

 

Trading in futures & options must be reported as a business unless you have only a few trades (say if only 2-3 trades) in the financial year. 

 

Please share the details of frequency of trading in F & O for apt answer.

 

 

Payal Chhajed
CA, Mumbai
3244 Answers
41 Consultations

5.0 on 5.0

Hello Sir,

 

Yes, it would be treated as LTCG.

 

Yes, you can set off the losses from F & O against mutual fund gains.

Karishma Chhajer
CA, Jodhpur
1375 Answers
8 Consultations

5.0 on 5.0

Dear Sir,

 

It would be treated as capital transactions only. So you can file ITR 2.

 

We may help you in filing returns.


Please share the details on jpayal.51089@gmail.

Payal Chhajed
CA, Mumbai
3244 Answers
41 Consultations

5.0 on 5.0

You can easily file ITR 2 and why would it be March 2017 it would be either 2004 cost or cost on 31.1.18 whichever is higher as compared to sale value as per the method u/s 112A.

 

If you need any assistance you can contact me.

Naman Maloo
CA, Jaipur
2291 Answers
19 Consultations

5.0 on 5.0

Hello Sir,

 

You can file ITR 2.

 

If you need any assistance, please take a phone consultation.

Karishma Chhajer
CA, Jodhpur
1375 Answers
8 Consultations

5.0 on 5.0

Hi,

 

- Trading in F&O is treated as business income as the purpose of trading is not to hold the contract for the investment purpose but to earn the profits on quick basis.

- COA will be comparison of actual cost, FMV as on 31.01.2018 and actual sell price.

 

Thanks

Vivek Kumar Arora
CA, Delhi
3221 Answers
166 Consultations

5.0 on 5.0

It would be treated as Business Income.

COA will be the higher of the actual cost of acquisition or the resultant of lower of the fair market value on 31.1.2018 or the sale value received.

Kindly contact us at badlaniassociates at gmail for return filing.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1136 Answers
3 Consultations

5.0 on 5.0

Hi

 

Yes it would be a Long term capital gain.

 

Yes, the set off shall be available.

Lakshita Bhandari
CA, Mumbai
3848 Answers
190 Consultations

5.0 on 5.0

It is better to consider that as a business income.

 

Grandfathering concept shall have to be applied and accordingly cost shall be considered.

 

We may assist you with return filing.

Lakshita Bhandari
CA, Mumbai
3848 Answers
190 Consultations

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