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Time of India
21-05-2025
- Business
- Time of India
New Income tax bill: Get one-time set off of long-term capital loss against short-term capital gains from tax year 2026–27
A one-time tax relief proposed under the new Income Tax Bill, 2025 could significantly reduce capital gains tax liabilities for many individual taxpayers. The new Income Tax bill allows long-term capital losses (LTCL) incurred up to March 31, 2026, to be set off against any short-term capital gains (STCG) from tax year 2026–27 onwards. This marks a key departure from the current provisions under the Income Tax Act, 1961, which only allow LTCL to be set off against long-term capital gains (LTCG). The proposed change, found in Clause 536(n) of the new bill, enables broader capital gains tax planning and faster loss absorption. 'Under clause 536(n) of the new tax bill, 2025 any capital loss, whether long-term or short-term, computed under the old Income Tax Act, 1961 and brought forward as on 31 March 2026, may be set off and carried forward against 'income under the head Capital gains' under the new tax bill 2025. Notably, this provision does not draw a distinction between long-term and short-term capital gains for the purpose of set-off,' said Chartered Accountant Dr Suresh Surana, according to an ET report. What's changing? Currently, under Section 74 of the Income Tax Act, 1961, long-term capital losses can only be set off against LTCG. This restriction limited the flexibility for taxpayers to manage losses. 'Currently, the Income Tax Act, 1961 allows the set-off of brought forward LTCL only against LTCG, limiting taxpayers' flexibility to offset LTCL with STCG,' said Aseem Mowar, Tax Partner at EY India. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like ตลาดหุ้นกำลังส่งสัญญาณว่าอยู่ในช่วงขาลง? IC Markets สมัคร Undo However, as per the transitional provision in the new Income Tax Bill, this restriction is being eased — but only temporarily — for losses incurred up to March 31, 2026. 'The proposed new Income Tax Bill, 2025 continues this restriction for LTCL incurred after April 1, 2026, but the 'Repeal and Saving' clause in Section 536 (specifically 536(2)(n)) permits the set-off of LTCL incurred until March 31, 2026, against any capital gains under ITB 2025 for tax years starting on or after April 1, 2026, for up to eight financial years immediately succeeding the financial year in which such loss was first computed under the current Income Tax Act, 1961,' Mowar explained. Why it matters This one-time relief can significantly reduce tax outgo for individuals who have accumulated LTCL over the years and have struggled to match it with sufficient LTCG. 'The transitional provision under Section 536(n)... carries significant implications for taxpayers holding accumulated capital losses, particularly long-term capital losses (LTCL), as on 31 March 2026,' Surana said. 'By permitting the set-off of such brought forward losses, whether long-term or short-term, against any form of capital gains... the legislation offers a temporary but meaningful departure from the restrictive loss-set-off rules under the current Income-tax Act, 1961.' It also opens the door for tax planning strategies ahead of FY 2026–27. 'Taxpayers can sell investments likely to incur long-term losses before April 1, 2026, allowing them to offset these losses against future short-term capital gains,' Mowar added. 'This dispensation, albeit temporary, allows taxpayers to leverage their losses more effectively, reducing overall tax liabilities.' Why is this only a one-time relief? Since the relief falls under the 'Repeal and Saving' clause of the new bill, it is designed to offer transitional assistance as the old Income Tax Act, 1961 is replaced. 'It is important to note that 'Repeal and Saving' clauses are typically included when old legislation is replaced with new one, ensuring that certain rights or obligations under the old law are preserved,' said Mowar. 'The majority may argue that this appears to be a well-thought-out dispensation... others may view it as an oversight, as it contradicts established provisions. Thus, it remains to be seen how the provision is ultimately enacted.' he added. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
21-05-2025
- Business
- Time of India
One-time set-off of long-term capital loss against STCG: New income tax bill 2025 allows this from tax year 2026-27 onwards
Tired of too many ads? Remove Ads What did the New Income Tax Bill 2025 say about long term capital loss? What does this mean? Tired of too many ads? Remove Ads What might be the impact of these changes for individual taxpayers? A temporary relief from the otherwise restrictive loss set-off rules under Income Tax Faster utilisation of capital losses and reduced income tax outgo Tired of too many ads? Remove Ads This can help with tax planning process for FY 2026–27 onwards Why is this set-off provisions relief a one-time measure and not recurring? The new income tax bill, 2025 has introduced a one-time relief for those who want to reduce their capital gains tax outgo by reducing their short-term capital gains STCG ). In technical terms, the new income tax bill , 2025 allows any brought forward long-term capital loss ( LTCL ) incurred up to March 31, 2026, to be set-off against any short-term capital gains (STCG). If you notice closely, the word is 'any', so it means any LTCL if incurred under the Income Tax Act, 1961 can be set-off with STCG. But since this is the New Income Tax Bill , 2025 so it is likely to be applicable from April 1, 2026 onwards i.e. tax year 2026–27 onwardsThis is a big positive development especially when you consider the fact that the existing Income Tax Act, 1961 allowed long term capital loss to be set-off only against long term capital gains ( LTCG ). So, by opening up the feature to set-off LTCL with both LTCG and STCG, the total capital gains tax outgo of an individual may get significantly lower. This may help many taxpayers, including ones who have been carrying forward the losses and are eligible to do so for the next two below to know more about this change in the proposed income tax bill, 2025 and what are its eligibility New Income Tax Bill, 2025 said: 'any amount of loss under the head capital gains, whether related to a long-term capital asset or a short term capital asset, referred to in section 74 of the repealed Income-tax Act, brought forward from the tax year beginning before the 1st April, 2026 had the Income-tax Act, 1961 not been repealed, shall be set off and carried forward against the income under the head 'Capital gains' computed under this Act for any tax year beginning on or after the 1st April, 2026 up to eight financial years immediately succeeding the financial year in which such loss was first computed under the repealed Income-tax Act;'This means under clause 536 (n) of the Income Tax Bill, 2025 taxpayers are allowed to carry forward and set off of brought forward LTCL incurred up to 31 March 2026 against all future capital gains (including STCG) from tax year 2026-27 Accountant (Dr.) Suresh Surana explains: 'Under clause 536(n) of the new tax bill, 2025 any capital loss, whether long-term or short-term, computed under the old Income Tax Act, 1961 and brought forward as on 31 March 2026, may be set off and carried forward against 'income under the head 'Capital gains'' under the new tax bill 2025. Notably, this provision does not draw a distinction between long-term and short-term capital gains for the purpose of set-off.'How different is the proposed change in comparison with the old provisions of capital gains?Surana says, previously under Section 74 of the Income-tax Act, 1961 , long-term capital losses (LTCL) could be carried forward and set off only against long-term capital gains (LTCG), now STCG is also Mowar, Tax Partner EY India, explains: 'Currently, the Income Tax Act, 1961 allows the set-off of brought forward Long-Term Capital Losses (LTCL) only against Long-Term Capital Gains (LTCG), limiting taxpayers' flexibility to offset LTCL with Short-Term Capital Gains (STCG).'Mowar adds: 'The proposed new Income Tax Bill, 2025 continues this restriction for LTCL incurred after April 1, 2026, but the 'Repeal and Saving' clause in Section 536 (specifically 536(2)(n)) permits the set-off of LTCL incurred until March 31, 2026, against any capital gains under ITB 2025 for tax years starting on or after April 1, 2026, for up to eight financial years immediately succeeding the financial year in which such loss was first computed under the current Income Tax Act, 1961.'We have asked experts about what might be the impact of these proposed changes in the new tax bill, 2025, here's what they said:Surana says: The transitional provision under Section 536(n) of the Income-tax Bill, 2025, carries significant implications for taxpayers holding accumulated capital losses, particularly long-term capital losses (LTCL), as on 31 March 2026. By permitting the set-off of such brought forward losses, whether long-term or short-term, against any form of capital gains under the new Income Tax Bill, 2025 the legislation offers a temporary but meaningful departure from the restrictive loss-set-off rules under the current Income-tax Act, says: 'This broader scope of set-off could result in faster absorption of losses, leading to reduced tax outgo in the initial years of transition and better cash flow management. It also opens up tax planning opportunities for taxpayers who might have been unable to fully utilise their LTCL due to the absence of corresponding LTCG in the past.'Mowar from EY India says: There exists tax planning opportunities. 'Taxpayers can sell investments likely to incur long-term losses before April 1, 2026, allowing them to offset these losses against future short-term capital gains. This one-time measure also aids taxpayers in adjusting to the new tax regime.'Notably, the 'Repeal and Saving' clause under which clause 536 (2)(n) falls, does not require that long-term and short-term losses be utilised separately. 'This dispensation, albeit temporary, allows taxpayers to leverage their losses more effectively, reducing overall tax liabilities. However, losses incurred after April 1, 2026, will still face the same limitations, with long-term losses offsetting only long-term gains,' says says the clause 536 (2)(n) of the new tax bill, 2025 is written under the 'Real and Saving clause'.'It is important to note that 'Repeal and Saving' clauses are typically included when old legislation is replaced with new one, ensuring that certain rights or obligations under the old law are preserved. This was clarified by the tax department in the General FAQ issued with the new tax bill, 2025 also,' says says: 'The majority may argue that this appears to be a well-thought-out dispensation given the distinction and specific provisions made, others may view it as an oversight, as it contradicts established provisions. Thus, it remains to be seen how the provision is ultimately enacted.'
Otago Daily Times
22-04-2025
- Entertainment
- Otago Daily Times
Canterbury's own 'Vera Lynn' returns home
By Dellwyn Moylan Music has always featured in former Ashburton-lass Jan-Maree Baughen's life - and she is returning to the town to put her talents on show. She is performing with the 3Decibelles in an Anzac tribute at the Ashburton Event Centre on April 24. It is a fundraising performance for the Ashburton Event Centre. Baughen (nee Armitage) grew up in Ashburton and went to Ashburton College where she was active in the performing theatre scene with the Ashburton Operatic Society (now Variety Theatre), Tinwald Musical Society, Ashburton Repertory Theatre and the Ashburton Musical Club. She will appear alongside her 16-year-old daughter, Chloe and friend Lizzie Howarth. ''It's such an honour and delight to be invited back to my hometown alongside my daughter and fabulous friend Lizzie to perform our Anzac tribute concert,'' she said. ''I had always wanted to produce a close harmony trio as I had grown up with dad playing all the beautiful old time dance music include music by Glenn Miller, dad's favourite the Andrew Sisters, Vera Lynn, and others,'' she said. ''Lizzie and I shared the same passion for the music of the 1920-1940s having grown up on that style of music. 3Decibelles formed in 2021. ''This will be a musical reflection and commemoration to honour our brave serviceman both past and present who have fought for our wonderful country. ''The show will also include our wonderful Chloe and her dancing tap shoes,'' Baughen said. Chloe, in year 12 at high school, is the choreographer and lead dancer, and like her mother has been involved in musicals, including as Dorothy in the Wizard of Oz. Baughen attributes her talents to parents, Pam and the late Arnold, who passed on their love of music to her. Pam was a singer and Arnold tinkled the ivories on the piano. She said her first foray into performing was as a four-year-old with Charmaine Quaid's ballet school (now known as Dance Worx Ashburton). At eight she took up singing lessons firstly in Ashburton before going to Christchurch for lessons where she later gained her LTCL and ATCL with distinctions. Baughen said the first musical she appeared in was as a nine-year-old in the Sound of Music where she played Marta VonTrapp, this was followed by Annie, Jesus Christ Super Star, Oliver and Good Evening Friends with Ashburton Operatic. Along with these productions she was also in three Ashburton College musicals. Her career and in fact her life nearly came to an end in her last year of college with a serious motor accident. She spent three months in Christchurch Hospital. 'I had a near fatal motor accident. I spent three months in Christchurch Hospital with multiple fractures and injuries,'' she said. 'I had to learn to walk and sing again. With love and support of wonderful friends, family and music teachers I built up the strength in my voice again. I went on to win the Ashburton Music Club's first scholarship in 1991,' Baughen said. She regularly performed at weddings, clubs and functions before moving to Christchurch when she was 18-years-old to undertake nursing studies. While living there she became a member of Canterbury Opera, ShowBiz Christchurch and 'The Kilmarnock Edition'. Following the Canterbury earthquake in February 2011 Baughen, husband Barry and their children, Nicholas and Chloe, moved to Auckland. Today Baughen is kept busy as an appearance medicine nurse, private vocal tutor/ director and musical director of 3Decibelles. Tickets are on sale now for the two performances of 'Watchcha Gonna Swing' on April 24 at the Ashburton Event Centre.
