Can short term capital loss be adjusted first with long term gains instead of short term capital gains?

Q. Can ST Loss arising from transactions, which do not include Security Transaction Tax be adjusted against Long Term gains, which attract 20% tax rate, assuming there are some Short term gains as well? Can I adjust my ST loss against LT Gains first and then from short term gains (no STT), so as to minimise the tax on me? Will this comply with Income Tax Act/Rules?

Ans. The setting off of short term losses first out of long term capital gains and then with short term capital gain is bad in law and considered to be evasion of tax.
As per Sec 70 of I.T Act short term capital loss is first to be adjusted with any gain from other short term capital asset "arrived at under a similar computation". In case of any further unadjusted short term losses the same can be adjusted from the long term gains.

Comments

Popular posts from this blog

Proof of Leave Travel Allowance

Interest on borrowed fund for self-occupied property

Must components in your Salary to minimize Income Tax