4 years before, I and my father sold a flat in which we were having 50:50 ownership & we had incurred Rs.10 lakhs loss as long term capital loss when we sold that flat.
So that year, I had shown Rs.5 lakhs loss as long term capital loss in my IT return & my father had also shown Rs.5 lakhs loss as long term capital loss in his IT return
These Long term capital losses are now being carry forward every year in our respective IT returns as they are yet to get offset with any other capital gains.
Now, this year FY 25-26, I want to sell my shares having holding period of more than 3 years & in which I have a long term capital gains of Rs. 10 lakhs.
So now, my plan is that I will sell shares having Rs.5 lakhs long term capital gains & transfer the remaining shares which are having long term capital gains of Rs. 5 lakhs profit to my father’s Demat account and then my father will shares these shares from his account.
So, while filing IT return for FY 25-26, I can easily offset this year’s Rs. 5 lakhs capital gains with earlier carry forwarded Rs. 5 lakhs long term capital loss so that my taxable gains will be zero & I wont have to pay any income tax.
Questions:
- Now, whether the Rs. 5 lakhs gains which my father got from selling these shares will be considered as long term capital gains? & can he offset it with his previously carry forwarded long term capital loss of Rs. 5 lakhs so that his taxable income also gets to zero & he wont have to pay any income tax.
- As, the original holding period of these shares is more than 3 years, so for me the profit from selling these shares qualify as long term capital gains, but whether it will be considered as long term capital gains to my father also or it will treated as short term capital gains to him?