By Chirag Nangia
I purchased 1500 shares of DHFL throughout 2015-2016. Post the decision, DHFL shares will not be listed now, and my funding worth is zero. Can I declare a long run capital loss?
—P V Krishna
Capital loss or achieve will be booked solely when any ‘transfer’ of a capital asset takes place. Pertinently, switch additionally contains extinguishment of the rights within the asset. Besides precise switch (sale) of an asset, the time period ‘transfer’ contains extinguishment of the rights within the asset. Since the shares have solely been delisted and are nonetheless in existence, they can’t be mentioned to have been extinguished or transferred and therefore there will be no capital achieve or loss. Although the funding within the shares appears to be fully irrecoverable and is precise loss, you can’t declare this loss because the shares have neither been extinguished nor transferred by you. Pertinently, loss will be claimed solely when the corporate goes into liquidation, or the shares are literally transferred by you to a different individual for consideration lower than the listed value of acquisition of shares.
I’ve been holding sure shares and mutual fund items. Do I’ve to pay any tax now?
—Ganesh
For taxation functions, capital achieve or loss arises when there’s a ‘transfer’ of capital asset. ‘Transfer’ contains sale/ trade/ relinquishment of belongings or extinguishment of rights for a consideration. Profit or features arising from switch of an immovable property held as a capital asset, are taxed below the top “Capital Gains” and incidence of tax is dependent upon the interval of holding. Capital achieve derived from sale of listed fairness shares, items of equity-oriented mutual fund held for a interval greater than 12 months leads to long run capital achieve (LTCG) that are taxable on the fee of 10% + cess + surcharge (if relevant), in extra of INR 1 lakh, with no indexation profit. However, if held for 12 months or much less, would lead to brief time period capital achieve (STCG) which is taxable at a fee of 15%.
Capital achieve derived from debt oriented mutual fund (DOMF) held for greater than 36 months would lead to LTCG that are taxable at fee of 20% and also you shall be permitted to avail the advantage of indexation. However, if held for 36 months or much less, would lead to STCG which is taxable at slab fee.
(The author is director, Nangia Andersen India. Send your queries to [email protected])
Source: www.financialexpress.com”