NRI to resident status. how to show loss on foreign assets

Background:

Disposal of investment on closure of a fund would amount to "transfer" under the Income Tax Act and the loss incurred on such transfer would be "capital loss". "Capital loss" can be set off only against "capital gains", which may be in relation to a capital asset situated in India or outside India. For a resident, a capital asset, whether situated in India or outside India, is on the same footing.

The capital loss incurred by you would be short term or long term depending upon the period of holding of the investment. The period of holding to be seen is different for different categories of assets. Thus, it would depend upon the type of your investment (whether it is in the form of shares, units in a trust etc.)

"Short term capital loss" can be carried forward/set off against both short term and long term capital gain. "Long term capital loss" can be set off only against long term capital gains. Further, such losses can be carried forward only upto a period of 8 years succeeding the year in which the loss is incurred.

As far as other income (in the form of dividend or other distribution, as the case may be) is concerned, such income would be taxable as income from other sources (tax rate will be as per applicable slab rate).

Answer to Query 1: Further information is required regarding nature of the investment fund, period of investment, category of income etc. to ascertain the exact tax treatment.

Answer to Query 2: Yes.Capital loss in relation to a foreign asset can be set off against capital gain generated in India (or outside India), as per the legal position explained supra.

Answer to Query 3: Yes. Carried forward capital loss can be set off against such capital gains as per the aforementioned provisions. 

Hi

Capital losses shall be adjusted against capital gains.

Yes, losses can be carried forward to set off with capital gains in future years.

Dear Sir,

Hope you are doing well !!

Yes, the capital losses from foregin assets can be set off from capital gain from Indian assets.

Yes, Capital gain losses can be carry forward for 8 AY.

Hello Sir,

Yes, the capital losses can be set off from capital gains generated in India.

The Income Tax does not allow loss under the head capital gains to be set off against any income from other heads – this can be only set off within the ‘Capital Gains’ head. Long Term Capital Loss can be set off only against Long Term Capital Gains. Short Term Capital Losses are allowed to be set off against both Long Term Gains and Short Term Gains.

Carry Forward of Losses: Fortunately, if you are not able to set off your entire capital loss in the same year, both Short Term and Long Term loss can be carried forward for 8 Assessment Years immediately following the Assessment Year in which the loss was first computed. If capital losses have arisen from a business, such losses are allowed to be carried forward and carrying on of this business is not compulsory.

- Losses from foreign PE funds will be capital losses and can be set-off and carried forward against Indian income.

- Foreign income can be set-off against the Indian capital losses. 

- Any tax paid on foreign income will be eligible for double taxation relief in India.

Basically the funds you are talking about are mutual funds and since they are registered or listed outside India so they would be treated as unlisted mutual funds and yes their loss can be set off against capital gain income in India based on certain conditions and Income earned from future foreign bonds can be set off against indian capital loss based on certain conditions.

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Thank you.