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Anil

Anil Rego  |388 Answers  |Ask -

Financial Planner - Answered on Nov 27, 2020

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more
subodh Question by subodh on Nov 27, 2020Hindi
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I have capital loss from sale of Equity Mutual Fund both from short term & long term. But there is a long term gain from sale of Debt Mutual Fund. How the income tax will be calculated? Can gain & loss be combined or it will be taxed separately? Shall be thankful to receive your advice.

Ans: As per amendment mentioned in budget 2018, if you have incurred any capital loss on selling Equity funds after 31-03-2018, you can set them off against any LTCG.

Short term Capital losses are allowed to be set off against both long term & short term gains.

If you are unable to set off the entire capital loss in the same year, both short term & long term capital losses can be carried forward for 8 assessment years.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Tejas

Tejas Chokshi  | Answer  |Ask -

Tax Expert - Answered on Jun 12, 2023

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Sir, I am having long term gain of 524352 and Short term Gain of 932400 and F&O loss of 512352. No other income. Pls advise how my tax liability would be calculated.
Ans: To calculate your tax liability in India based on the provided information, we need to consider the tax rates for long-term capital gains (LTCG) and short-term capital gains (STCG), as well as the treatment of losses from Futures and Options (F&O).

Long-term capital gains (LTCG):

LTCG on shares is taxable at a rate of 10% if the gains exceed Rs. 1 lakh.
In your case, the LTCG is Rs. 524,352, which is below the threshold of Rs. 1 lakh. Therefore, tax is payable on the LTCG @ 10% of Rs. 424,352 = Rs. 42435/=
Short-term capital gains (STCG):

STCG on shares is taxable at the applicable income tax slab rates.
Assuming you fall under the highest income tax slab rate of 30%, the tax on STCG would be calculated as follows:
STCG tax = STCG * tax rate
= 932,400 * 30%
= 279,720
Losses from Futures and Options (F&O):

F&O losses can be set off against both long-term and short-term capital gains.
In your case, the F&O loss is Rs. 512,352.
Since you have both long-term and short-term gains, you can set off the F&O loss against these gains.
Calculating the tax liability:

Net Short-term Capital Gains (STCG): 932,400

F&O Loss: -512,352

Taxable Short-term Capital Gains: 932,400 - 512,352 = 420,048

Tax on Short-term Capital Gains: 420,048 * 30% = 126,014.40

Total Tax Liability:
Tax liability = Tax on Short-term Capital Gains
= 126,014.40

Long term capital = 42435=20

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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