• I suffered short-term capital loss (STCL) on sale of listed shares in FY 2016-17. The same year, I earned short-term capital gains on listed securities as well as long-term capital gain on sale of immovable property. I would like to set off STCL, first against long-term capital gain as long-term capital gain is taxable @ 20% and then against short-term capital gain taxable @ 15%. Is there any restriction?
– Ashok Mahapatra
Under the income-tax law, short term capital losses can be adjusted against both long-term as well as short-term capital gains. There is no order prescribed for setting off of such losses. Therefore, it is the taxpayer’s choice to decide order of set-off of losses. Hence, short-term capital loss can first be set off against long-term capital gains and thereafter against short-term capital gains. For your information, please note that while this is the legal position, practically the ITR utility of the income-tax department auto computes the capital gains by first adjusting the short term capital loss against the short term capital gains and only thereafter, if any loss remains, then it is set off against long-term capital gains.
• I am an individual taxpayer and had filed the Income Tax return for AY 2016-17. My father had also filed his return for AY 2016-17 within the prescribed time and had claimed refund of Rs 60,000. Unfortunately, he passed away sometime back. I had closed all the bank accounts which were under his name. Can you please explain the procedure for claim of refunds by legal heir?
In case of non-issuance of refund due to reasons such as the death of assesse and account on hold, CBDT has prescribed a certain procedure to be followed by the legal heir in order to successfully claim the refund amount. You need to approach CPC with request on the legal heir status and pending refund and thereafter await the communication from CPC regarding the same. CPC will forward the same to the respective jurisdictional Assessing Officer for further verification. On receiving the communication from CPC, you need to visit the respective AO along with the proof. If the AO approves the claim after conducting proper verification, the refund will be routed to your bank account.
The writer is the founder of RSM Astute Consulting Group.
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