YOUR REQUESTS: INCOME TAX: The long-term capital loss on NCD can be offset by a long-term capital gain

The unadjusted loss, if any, can be carried forward to the next eight valuation years.

By Chirag Nangia

I was a retail investor in term deposits and NCD of an NBFC whose debt resolution process recently ended. My FD of Rs 3 lakh was made in July 2017 for 48 months but I only received Rs 73,000 in September 2021. I had also received NCD of Rs 3.28 lakh in their IPO in August 2016 which was due in August 2019 and I received Rs 1.6 lakh in September 2021. Can I claim a long term capital loss?
—Hardeo Singh
A capital gain or loss can only arise in the event of a “transfer” of a capital asset. Fixed deposits made with an NBFC cannot be transferred for remuneration. There is no provision in the Income Tax Act for claiming loss of deposits in the event of the insolvency of a non-bank finance company. The amount of loss suffered by you on deposits should not be claimed as a deduction and should be interpreted as a net loss. In addition, since you have held the listed CRS for more than one year, the CRS loss will be considered a “long-term capital loss”. This loss can be offset by long-term capital gains. The unadjusted loss, if any, can be carried forward to the next eight valuation years.

Is Taking Out A Home Loan To Save Tax A Good Decision? I exhaust everything under 80C and invest under NPS.
—Hitesh Bathija
A deduction of up to 1.5 lakh is allowed under section 80C due to the repayment of the principal of the mortgage taken out for the purchase / construction of a property. In addition, taxpayers can claim a deduction for interest borrowed for the acquisition, construction, repair or reconstruction of real estate from the income calculated under “real estate”. In case of rental of goods, there is no monetary limit on the amount of the deception.

The interest deduction on the ownership of a detached house can be up to Rs 2 lakh, which is reduced to Rs 30,000 if construction is not completed within five years. In addition, you can claim the interest deduction for the pre-construction period in five consecutive installments, starting with the year in which the property is acquired or built. Although you may not be able to claim a mortgage principal repayment deduction due to the exhaustion of the prescribed limit, you can still claim the interest item deduction.

The writer is director, Nangia Andersen India. Send your questions to [email protected]

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