Can you set off Ltcg/Stcg tax liability against Property Investment?

My financial advisor made various changes to my portfolio last year. He had swapped out underperforming mutual funds for better performing ones. This resulted in a significant amount of tax burden, both short and long term. I just took out a loan against my mutual funds to purchase a home for Rs 12 lakh. Is it feasible to receive tax relief as a result of this investment?

Section 54F of the Income Tax Act exempts capital gains accruing on the transfer of a long-term capital asset other than a residential house property (mutual funds in your case) if the gains are invested in a “new residential dwelling property” within the timeframe prescribed. An investment in an ashram property cannot be considered as a residential property, conservatively. As a result, the investment you made will not be eligible for Section 54F exemption. Long-term capital gains are also not eligible for deductions under Sections 80C through 80U. As a result, long-term capital gains on the transfer of listed units of an equity-oriented mutual fund are taxable at 20% (plus relevant surcharge and cess) or 10% for gains in excess of Rs 1 lakh.

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Short-term capital gains, as defined in Section 111A, will be taxed at 15% on the sale of listed units of an equity-oriented mutual fund. Any other short-term capital gains will be taxed at the slab rates in effect. Short-term capital gains referred to in Section 111A are also not eligible for a deduction under Sections 80C to 80U. You may, however, claim deductions from STCG that are not covered by Section 111A. Furthermore, because there are no provisions for set-off of current year’s tax liability against next year’s, this year’s tax liability must be discharged this year.

I am a salaried individual with a Rs 1 lakh long-term capital loss. Which ITR form must be submitted?

Intra-day trading income is classified as business income and is taxed under the heading ‘Profits and Gains from Business and Profession.’ Gains on the sale of securities held as investments, on the other hand, are taxed as long-term or short-term capital gains, depending on the holding period. You can use Form ITR-3 to report salary income, profits and gains from your business or profession, as well as capital losses.