Your Queries: Income Tax -You can offset long term capital loss on share sale against any LTCG

March 25, 2020 12:30 AM

Once tax liability is calculated, you may claim a deduction of TDS/ taxes paid on such rental income, to arrive at net tax demand due.

In summary, such capital loss cannot be set off against any other head of income such as salary, house property, business income, etc.In summary, such capital loss cannot be set off against any other head of income such as salary, house property, business income, etc.

By Chirag Nangia

I have lost lot of money in markets since January. Can I offset the loss with gains on other instruments?
—Sameer Nathan
Long-term capital loss on sale of shares may be set off only against gain arising from any other long-term capital asset. However, short-term capital loss from sale of shares may be set off against gain arising from any other capital asset, whether long term or short term. In summary, such capital loss cannot be set off against any other head of income such as salary, house property, business income, etc.

I have got a tax due notice for Rs 50,000 on rental income. How will I calculate the rental income and who much tax do I have to actually pay?
—Atul Bondia
Income under head house property is computed by determining the gross annual value of property, which is higher of the fair rental value or the actual rent received. A taxpayer is entitled to deduction of municipal taxes paid from this value. Thereafter, a standard deduction of 30% of the remaining value is allowed. Any interest paid on home loan may also be claimed as deduction subsequently. Once tax liability is calculated, you may claim a deduction of TDS/ taxes paid on such rental income, to arrive at net tax demand due. If after the calculations, you agree to the demand, pay the tax. If your calcula-tions differ, you may reply accordingly.

How is tax calculated on income from derivatives?
—Divya Mittal
Profit from trading in derivatives may be treated as speculative/ non-speculative business income or as capital gains based on factors such as nature of derivative and period of holding. While capital gains is taxed at prescribed rates (on basis of period of holding), business income is taxed at slab rates applicable to an individual.

Will the pre-filled income-tax returns form contain all details of my stock trading and mutual fund transaction?
—Prashant Kumar
Presently, pre-filled income tax returns don’t contain all details of stock trading/ mutual fund transactions. However, income tax return forms for AY 2020-21 (due for filing in July/ September 2020 for Financial Year ending on 31 March 2020) are yet to be notified. Once these forms are notified, it may be seen how much information is already pre-filled and how much needs to be filled in manually.

The writer is director, Nangia Andersen Consulting. Send your queries to fepersonalfinance@expressindia.com

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