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By Chirag Nangia
I have sold Dewan Housing Finance Ltd NCDs within a period of less than three years at a loss. Can I adjust short term capital gain against this loss?
—Ajit Kumar Gupta
For tax purposes, capital assets are required to be classified as either short-term or long-term, based on the period of holding. Non-Convertible Debentures (NCDs) or bonds are considered as long-term capital assets if these are held for a period of more than 36 months. Else, the same are regarded as short- term capital assets. Further, Income Tax provisions allow set-off of short term capital losses against both short/ long term capital gains. Therefore, the loss that you have incurred shall be reported as short-term capital loss, which you can adjust against your short-term capital gains.
Please advise about the notification under Section 54EE for investing long term capital gains in specified assets.
—N A Viswanathan
Where capital gains arising from transfer of a long-term capital asset are invested in specified funds, tax-payer can claim exemption under Section 54EE. ”Specified funds” for the purpose of this section shall be fund-of-funds which essentially invests in startups or shares of a startup. The exemption is restricted up to Rs 50 lakh in the financial year and the subsequent financial year. Alternatively, you may claim deduction under Section 54F if you invest the LTCG from transfer of any asset in a “new residential house property” within the stipulated time frame.
I joined a new company six months ago. Is it mandatory to transfer PF to a new company account? The new firm’s PF is the company’s own trust. Is it safe to transfer and what are the tax implications?
Employees having multiple Employees’ Provident Fund IDs are required to transfer PF balance into the latest ID. Transfer of balance from your previous employer to your current employer can be done online through the unified portal of EPFO. You must provide all personal details and date of exit from previous employment and then proceed to file the transfer request online through the One Member-One EPF Account (Transfer Request) module for filing transfer claim.
The writer is director, Nangia Andersen India. Send your queries to firstname.lastname@example.org
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