| Question And Answer | |
|---|---|
| Subject: | Capital gains without STT , set off of losses . |
| Category: | Income-Tax |
| Querist: | S.A. Mehta |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Capital Gains, Capital loss, set off |
| Date: | June 26, 2021 |
A company is earning capital gains from sale of shares attracting STT as well as capital gains from other shares/units of MFs without STT. Can the company adjust only the losses from the STT paid shares against the profit of non-STT paid shares without adjusting it against the profits from STT paid shares? Can the Income-tax department raise objection and adjust STT paid losses first against the profits from STT paid shares and only the remaining loss is allowed to be adjusted against profit from non-STT paid shares?
As per section 70 & 71 of the Income-tax Act, 1961 governing the provisions relating to Set-off of losses, long term Capital Gains can be set-off against long term Capital Gains only.
The Legislation has not put any embargo to exclude long term capital loss from sale of shares to be set off against long term capital gain arising on account of sale of other capital asset
The Hon’ble Income-tax Appellate Tribunal Mumbai Bench in the case of Raptakos Brett & Co. Ltd. v. DCIT [2015] 58 taxmann.com 115 (Mumbai) held that Long-term capital loss on sale of shares attractive STT can be set off against long-term capital gain on sale of land in accordance with section 70(3) of the Act.
Further, Hon’ble Income-tax Appellate Tribunal Mumbai Bench in the case of M/s. Rare Investments v. CIT ITA No.3409/Mum/2018 dated September 11, 2019 held that assessee is entitled for set off of STT paid long term capital loss with non-STT paid long term capital gains.
Sir, I would like to further clear my query. Whether STT paid Capital loss can be adjusted against non-STT paid Capital Gain without first adjusting it against STT paid Capital Gain. For example, profit/loss from STT paid 3 scrips is Rs.-10, Rs.-15 and Rs.20 respectively. Can I adjust it against non-STT loss of say Rs.30 without first adjusting it against STT paid profit of Rs.20/-.