YOUR QUERIES: INCOME TAX: Long-term capital loss on NCD can be set off against long-term capital gain

Unadjusted loss, if any, can be carried ahead to the next eight evaluation years.

By Chirag Nangia

I used to be a retail investor in mounted deposit and NCD of a NBFC whose debt decision course of concluded lately. My FD of Rs 3 lakh was made in July 2017 for 48 months however I acquired solely Rs 73,000 in Sept 2021. I additionally had been allotted NCDs of Rs 3.28 lakh of their IPO in August 2016 whose maturity was due in August 2019 and I acquired Rs 1.6 lakh in September 2021. Can I declare long-term capital loss?
—Hardeo Singh
Capital gain or loss can solely come up when there’s a ‘transfer’ of capital asset. Fixed deposits made with an NBFC can’t be transferred for a consideration. There aren’t any provisions beneath the Income Tax Act for claiming loss of deposits in case of insolvency of a non-banking finance company. The quantity of loss suffered by you on deposits should not be claimed as a deduction and will be construed as lifeless loss. Further, because the listed NCDs had been held by you for a interval exceeding one year, the loss in respect of NCDs will be deemed to be “long-term capital loss”. Such loss can be set-off against long-term capital features. Unadjusted loss, if any, can be carried ahead to the next eight evaluation years.

Is availing a house mortgage to save lots of tax a sound choice? I exhaust every little thing beneath 80C and make investments beneath NPS.
—Hitesh Bathija
A deduction as much as `1.5 lakh is permitted beneath part 80C on account of principal compensation of residence mortgage taken for buy/ building of home property. In addition, taxpayers can declare deduction in respect of curiosity borrowed for acquisition, building, restore or reconstruction of a home property from the earnings computed beneath the top “house property”. In case of let-out property, there is no such thing as a financial cap on quantity of deception.

Deduction of curiosity in respect of self-occupied home property is as much as Rs 2 lakh, which is decreased to Rs 30,000 if building is just not accomplished inside a interval of 5 years. Besides, you can declare deduction of curiosity for pre-construction interval in 5 consecutive instalments, from the year through which the property is acquired or constructed. Although you might not be in a position to declare deduction in respect of principal compensation of residence mortgage on account of exhaustion of prescribed restrict, you should still get benefitted by claiming deduction of curiosity ingredient.

The author is director, Nangia Andersen India. Send your queries to [email protected]

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