B Shah asked 5 months ago
I have brought forward value of long term capital loss of Rs. 350000/-
this year I earn Long term capital gain of Rs. 80000/-
As we know that long term capital gain is exempt upto Rs. 100000/- for FY 2022-23.
So this year’s Long term capital gain will be treated as exempt or it will be adjusted from loss brought forward from earlier year. Which treatment will be given first effect. If my current year’s LTCG was 125000/- then how much to be adjusted from loss. (1) full long term gain to be adjusted from loss (2) OR only taxable part..i.e. above rs. 100000/- is adjusted from brough forward loss. Please clarify.
Ashok answered 5 months ago
For FY 2022-23, Adjustment of long term capital gain is done in such a way that –
(1) First it is adjusted from brought forward losses.
(2) If any value of Current year’s long term capital gain remain then it is exempt upto rs. 100000/- and balance LTCG above Rs. 100000/- is taxable @ 10%.
Now coming to your case:-
Brought forward value of long term capital loss = Rs. 350000/-
Current year’s long term capital gain = Rs. 80000/-
Carried forward long terms capital loss after adjustment of current year’s gain = 350000-80000 = Rs. 270000/-
Now coming to second scenario;-
Brought forward value of long-term capital loss = Rs. 350000/-
Current year’s long term capital gain = Rs. 120000/-
Carried forward long terms capital loss after adjustment of current year’s gain = 350000-120000 = Rs. 230000/-
Let’s take one more example for clarity:-
Brought forward value of long-term capital loss = Rs. 50000/-
Current year’s long term capital gain = Rs. 170000/-
Carried forward long terms capital loss after adjustment of current year’s gain = 50000-50000 = Rs. NIL
balance capital gain = 170000-50000 = 120000/-
Long term capital gain exempt = 100000/-
taxable @ 10% = 20000/-