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I hold shares of Easun Reyrolle Ltd at average purchase price of ₹114.65. The company has gone into liquidation. The shares cannot be sold in the market. Can I claim capital loss in my income tax statement? If so, how?
Mathew Joseph
As per section 2(47) of the Income Tax Act, 1961, transfer, in relation to a capital asset, includes the sale, exchange or extinguishment of any rights. In the event the company has gone into liquidation, you have to report the capital loss (if any) in your tax return. Please note that depending on the period of holding, this capital loss could be either long-term or short-term. While short-term capital loss can be set off against any gains (long-term and short-term); long-term capital loss can be adjusted only against long-term capital gain. In case you have any unadjusted loss, then it can be carried forward for set off for the next eight tax years.
I am a 75-year-old senior citizen and sold part of my inherited property (land) last month. Is there a ₹3-lakh reduction in long-term capital gains (LTCG) on sale of land for senior citizens aged 60-80 years? Is it for seniors with taxable income less than ₹3 lakh in the taxation year? If so, is the ₹3-lakh limit reached after various concessions under Section 80-C to 80-U?
Chacko Varghese
Under the income tax regulations, the basic exemption limit applicable for senior citizens aged between 60 and 80 years is ₹3 lakh.
As per section 112 of the Act, a resident assessee, whose total income before considering long-term capital gains is below the basic exemption limit, can offset the long-term capital gains (LTCG) against the balance basic exemption limit that’s available.
If you don’t have any other income, then the entire ₹3 lakh of basic exemption limit can be adjusted against your capital gains. However, deductions under chapter VI A (section 80 C to 80 U) cannot be claimed against such LTCG.
The writer is Partner, Deloitte India.
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