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I am an equity investor for the past 20 years. Now I am holding shares in different companies worth ₹5.6 lakh in demat account. Daily listing is not taking place and are not removed from the demat account. My query is whether this investment can be treated as an long term loss for deduction against long term profit. Please kindly clarify the same as per the Income Tax rules.
J.Krishna Kumar
Capital gains would arise only when the underlying assets are transferred. In your case you still hold the shares and they are not sold. Hence, it is not possible to claim capital loss on these shares. Reduction in value of investments cannot be claimed as capital loss for setting off against capital gains. Only actual realised loss can be set off.
Income Tax Act allows setting off long-term capital loss only against long term capital gains. Long term capital loss cannot be set-off against short term capital gains or any other income. Unadjusted loss can be carried forward for eight years to be set off against long term capital gains.
Income Tax notification dated April 21 - Addition of new rule (12AB) to the Income Tax Rules, 1962. I refer to the notification which inter alia states "if the person’s deposit in one or more savings bank accounts is ₹50 lakh or more during the previous year, the individual has to file returns”. Please clarify how to arrive at the aggregate amount to qualify for filing return. Whether the amount of ₹50 lakh or more is the aggregate amount deposited during the year together in all the savings bank accounts or the balance outstanding at the end of the year or it any other parameter to arrive at the threshold amount?
V.K. Ramachandra
One of the conditions for filing is when deposits of ₹50 lakh or more are made during the year in one or more savings bank accounts. Hence, if the aggregate of deposits made during the year in all savings bank accounts is ₹50 lakh or more, then there is a requirement to file the tax return. The criteria is aggregate deposits made during the year and not balance at the end of the year.
The writer is Partner, Deloitte India
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