Industry & Economy
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Taxation
ICAI may approach CBDT on long-term capital loss
K.R. Srivats
New Delhi
,
July 12
THE Institute of Chartered Accountants of India (ICAI) may soon approach the Central Board of Direct Taxes (CBDT) over the issue of `set-off' of the `long-term capital loss' arising on securities transactions entered in stock exchanges against any short-term gains.
The Finance Minister, Mr P. Chidambaram, had proposed a new tax regime on securities transactions. The Government has proposed levy of 0.15 per cent tax on the value of securities transactions in stock exchanges.
Besides seeking to abolish the tax on long-term capital gains, the Finance Minister had also proposed reduction in the rate of tax on short-term capital gains to 10 per cent from 20 per cent.
"The new tax regime on securities transaction has both positives as well as negatives. While the new regime may encourage more investments, it may also lead to disputes on what are trading activities and what are investment activities. There is also no clarity on the set-off of long-term capital loss on securities transactions," Mr Sunil Goyal, President of ICAI, told Business Line here.
He pointed out that losses cannot be set off against any income that is tax-exempt. "We will raise the issue (with CBDT) as to whether the long-term capital loss can be set off against any short-term gains," Mr Goyal said.
The ICAI President held that the Budget is in tune with the objectives of the national common minimum programme (NCMP). "The proposed National Employment Guarantee Act is a step in the right direction and would address issues of unemployment," he said.
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