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Home MONEY Capital losses can be set off towards capital gains

Capital losses can be set off towards capital gains

I have taken a mortgage for building of a house in joint capacity with my father. But I am not a co-proprietor. Can I get myself added as the co-owner now—as I have by now taken the mortgage —to be eligible for tax deductions? Also, suppose a person buys a stock, but at the time of liquidating the inventory, the investor tends to make a loss. Is this loss total tax deductible?

—Avtar
On your to start with query, a deduction for interest and principal repayment towards a housing financial loan is readily available below Segment 24 and Area 80C, respectively. For the purpose of these deductions, you are expected to be the owner of the assets and the cash flow from such assets must be chargeable to tax in your hands under the head “income from dwelling home”.
Even though there is no express clarity, each economical ownership and legal ownership of the assets may perhaps be viewed as by tax authorities for figuring out the ownership of the house. Appropriately, in scenario where by you are not the legal co-owner of the house, the claim of the stated tax deductions may perhaps be contentious.
After you get the legal co-ownership, the deductions really should be apportioned in the ratio of the respective funding done by your father and you in the direction of the house or bank loan, in just the specified limits. It may possibly also be pointed out that the two the deductions, can be claimed only right after the construction is concluded and possession of the house is been given.
In situation you are opting for the new taxation regime, deductions underneath Sections 80C and 24 for interest on bank loan taken for self-occupied home will not be offered.
Additional, for acquiring yourself added as a co-owner to the residence now, you should really look for legal opinion on the ideal documentation, stamp duty implications and any other implications.
On your 2nd query, the established-off of losses on the sale of shares will count on the character of the capital asset (Indian or international stock) and also the mother nature of capital losses (short-term or prolonged-term) incurred from the sale of the stock. Capital losses are deductible only against capital gains through the 12 months, as per the regulations recommended. Also, any unadjusted capital losses can be carried forward up to 8 succeeding economical decades for set off only from long term capital gains.
Parizad Sirwalla is companion and head, international mobility services, tax, KPMG in India. Queries and views at mintmoney@buddymantra.com

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