Question And Answer
Subject: Can I claim set-off of long term capital loss incurred on sale of listed securities against taxable income?
Querist: Mukesh
Answered by:
Date: April 18, 2021
Query asked by Mukesh

I have deployed surplus funds by way of investments in listed shares & securities. During the relevant year I sold holdings in different listed companies and derived long term capital gain of Rs.77,330/- and incurred long term capital loss of Rs.6,05,425/-. The AO noted that the aggregate long term capital gain of Rs.77,330/- derived on sale of listed shares fulfilled the conditions prescribed in Section 10(38) and therefore held it to be exempt from income-tax. With regard to claim of long term capital loss of Rs.6,04,425/-; he held that since the gain derived from sale of long term listed shares is exempt then any loss incurred there from was to be ignored. He accordingly denied the claim for carry forward of long term capital loss of Rs.6,04,425/-u/s 74 of the Act. Is the AO right in his decision?

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