Is there any way to adjust long term capital loss with short term capital gain of same year? While section 70(3) restricts such adjustment, but is there any escape route? Any supporting case law may be shared.
Asked 3 years ago in Income Tax from delhi, Delhi
Loss under the head Capital Gains (LTCL or STCL) cannot be set-off against any other head. (Interpretation: Loss from other heads can be set-off against Capital Gains)
However, Carry forward of losses (other than loss from house property and unabsorbed depreciation) is permissible if the return of income for the year, in which loss is incurred, is filed in time.
I believe the question is not properly understood. I have asked whether any planning idea is there wherein short term capital gain be adjusted against long term capital loss of same FY.
Asked 3 years ago
Long term capital loss can only be set off against Long term capital gain.So it can not be set off against Short term capital gain.
You are absolutely correct, that long term capital loss, can be set off against long term capital gains only and nothing else. Case law will have to wait for some time, immediately and this is only current year income I presume.
Long term Capital Loss can only be carry forwarded to next year. It can't be adjusted with current STCG.
No other remedy is available as such.
Section 70 (1) discuss about the set off of the loss within the same head of Income as discuss in section 14 , except under the head of "Capital gain" . section 70(2) and section 70(3) is for the short term capital loss and long term capital loss under the head Capital Gain .
As per section 70(3) , a long term capital loss has to be set off from a long term capital gain only .
CA, New Delhi Area, India
Yes, long term capital loss can not be set off against short term capital gain in any way.
Long term capital losses can be adjusted against long term capital gains only u/s 70(3). As long term capital gains are taxed at concessional rates, the losses cannot be set off against incomes, which are taxed at normal rates. Hence,the answer to your question seems to be NO.