• Tax on capital gain

I am a salaried person ,I invest in share and option.I incurred Rs 85000 thousand loss in equity and Rs 45000 profit in option for this financial year. What will be tax liability for me.
Asked 2 years ago in Capital Gains Tax from Gurgaon, Haryana
Query on Capital Gain :

Profit or gain from transaction of derivatives will be taxed under the head, ‘Profit and gain of business or profession' or ‘Capital gain', which depends on the nature of the asset held by a person. The dividing line is very thin. The issue should be determined by facts and circumstances of each case. Hence, it has to be decided by considering some of the relevant factors such as the length of the holding period, intention, regularity or frequency, source of funds, the administrative set-up, use of the sale proceeds, circumstances leading to the sale, accounting treatment, manner of acquisition, proportion of such income, and the overall time devoted for the activity.

In you case looking at the quantum of transactions and and other facts you can treat it as a short term capital gain and adjust this gain against loss on equity trading as your intention may not be of a business man its more of an investor . 

Hence, you dont need to pay any capital gain tax. Further you are eligible to carry forward loss of Rs. 40000 to next assessment year which can be adjusted against next year's capital gain.
Abhishek Dugar
CA, Mumbai
2934 Answers
123 Consultations

5.0 on 5.0

NPS under Sec 80 CCD(1B) : 

As per the amendment made on Finance Act 2015, you can invest in NPS even after you have exhausted the limit of INR 150000. However, the maximum deduction allowed under section 80 CCD(1B) is INR 50000. This is in addition to INR 150000.

Hence, upto Rs. 50000 you can invest in NPS.

However, there are other investment options also available for tax saving. 
Abhishek Dugar
CA, Mumbai
2934 Answers
123 Consultations

5.0 on 5.0

Dear Sir,

Yes, you can claim an additional amount of Rs.50,000/- if invested under NPS. Total Claim would be Rs.200,000/-.

Hope this clarifies your query.

Please feel free for any further clarifications.

Thanking You.

Regards,
CA Rohit R Sharma
BCOM, CA, LLB - GEN, CERT. FAFP, CERT FAFD.
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

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The long term capital gain on sale of equity through stock exchange, where STT would have been paid, is exempt from tax. On the same analogy, if there is long term capital loss, the loss cannot be allowed to be set off against non exempt incomes. Only short term capital losses can be set off against short /long term capital gains. So in your case, if the loss in the equity is through the stock exchange transaction and is long term in nature, it cannot be set off against profit on option. However, if the loss is short term capital loss, it can be set off against profit in option, whether it is long term or short term.

You can invest in NPS and claim additional deduction u/s 80CCD(1b), subject to fulfillment of conditions specified therein.  
B Vijaya Kumar
CA, Hyderabad
845 Answers
48 Consultations

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Sir we need total breakup of income to calculate the total tax liability along with your investments U/s. 80C.

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

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also you can invest in NPS and claim benefit U/s.80CCD
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

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