Long Term Capital Gains

Sanonymous 1
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Situation: I got a long term capital gains in the year 2010 (July): say for amount 10 lakhs. I put 8 lakhs in an LTCG account with SBI the same year within 6 months. Then I got a long term capital loss in year 2012 (April) for the same property: say for amount 6 lakhs. Now I want to withdraw the amount from the capital gains account and pay taxes as I am not able to utilize the amount in purchasing house.

Question1: What will be my tax liability in the year 2012, do I have to pay tax on the capital gains of 8 lakhs and the loss of 6 lakhs will be carried forwarded. Or will I have to pay tax on 8 lakhs - 6 lakhs.

Question2: Do I require to provide an NOC from the Income Tax Office for closing the capital gains account.

capital-loss long-term-gains capital-gains income-tax
1 Answers

In my opinion, As long term gains occurred in a different financial year previous to loss, they cannot be set off against capital loss now.

If you opened a capital gain scheme account but unable to buy property, you would have to pay income tax on gains. Once this taxes are paid, you can withdraw amount from account after getting written permission from assessing officer.

Now in this financial year 2012-13, you would have to pay 20% income tax on capital gains of 10 lakh. Losses of 6 lakh can be carried forwarded.

Pankaj Batra5212

Thanks Pankaj for the prompt reply, another related query, would the amount from the account be considered as capital gains after I close the account or will it be added in the annual income.

Sanonymous•

You would need to pay income tax on actual capital gains against which this account was opened, only then assessing officer would give you permission to close account and withdraw amount.

Pankaj Batra•
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