(a) In the Income Tax return filed for the AY 2019-20, I claimed that part of LT capital gains earned on the sale of equity shares during the FY 2018-19 relevant to the AY 2019-20 should be set-off against ST capital loss of ₹ 259,978.53/- incurred on sale of equity shares during the financial year 2010-11 relevant to the AY 2011-12. (b) My claim for set-off mentioned in Schedule CFL of ITR for AY 2019-20 is in accordance Section 74 of the Income Tax Act. According to Section 74 capital loss can be carried forward under this section for eight AYs immediately succeeding the AY for which the loss was first computed. AY 2019-20 is the eighth AY succeeding AY 2011-12. (c) I had filed all the IT returns u/s 139 (1). (d) On November 1, 2019, Dy Commissioner of IT, CPC, Bengaluru sent me a notice that my claim was wrong and gave an opportunity to explain my claim. Immediately I sent a reply by Speed Post as per (b) above and also filed online reply. (e) However, CPC rejected my claim and sent asstt order after making adjustment. (f) Is the IT Department right in rejecting my claim? If it is not, what is the course of action available to me?
- From A.Y. 2019-20, LTCG on sale of equity shares is dealt with section 112A. It is exempt upto Rs.1 lacs and thereafter taxable @ 10%. Please check whether calculation was done as per 112A.
Please check whether LTCG is claimed under section 112 or 112A.
Hi,
No, as per the facts presented by you, income tax department is not correct in rejecting your claim.
You may file a rectification against the order and simultaneously also file an appeal before CIT(A).
No he is not correct as you can carry forward the loss to eight assessment years and this being the eight year you are allowed to set off such loss.
But the question here is:
1. Had you filed the return for AY 11-12 in time.
Had you carry forwarded the loss then?
2. It wouldn't be an assessment order it would be an intimation under 143(1) if it's from CPC.
3. You can file rectification request or appeal against such order.
If you need any assistance feel free to have a phone consultation and then you can share the notice so that I can guide you properly.
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Thank you
Dear Sir,
Hope you are doing well !!
No, the IT department is not right. You can set off the losses.
It is advisable to file a rectification u/s 154 against the order.
We my assist you in entire procedure.
Hello,
AS per the details provided by you, your claim for set-off loss is correct.
You should file a rectification for your return.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
