I am a senior with income from pensions, individual property, and interests from investments. I have also realized a long-term tax-free capital gain of Rs 20,000 from equity funds. Can I file ITR-1 for 2020-21?

Amit Maheshwari, Partner at AKM Global, says: “Form ITR-1 is for ordinary residents with a gross income of Rs 50,000 from wages, homeownership and any other source (benefits, etc.) and farm income of up to 5,000 rupees. No person is a manager of a company or has invested in unlisted stocks. Since you have made LTCG of equity mutual funds, although it is tax-exempt, in this case, you cannot file ITR-1. ITR-2 is required.

During the period 2019-20, he made a short-term capital gain of Rs 3 lakh on equity and a long-term capital loss of Rs 25 lakh. The normal taxable income after all deductions is Rs 9 lakh from the pension, interest, etc. What will my income tax be? Will the income loss be offset in other items such as pensions and bank interest? Can I transfer the benefits? 

"In the event of a long-term capital loss, you can only reduce the long-term capital gains loss. A long-term capital loss cannot be offset by income from salary, pension, or any other source," says Arthet Gupta, CEO of ClearTax. If there are no long-term gains in the current year, you must carry over the loss to the next year. You can offset or reduce the carry-over loss against any taxable long-term capital gains in the next eight years. Your total income will consist of short-term capital gains and regular income subject to Tax, totaling Rs 12,000. However, the short-term capital gains tax of 15% (plus income tax), and the income balance of Rs 9 lakh is taxed at slab rates. Your tax will be Rs 184,600.

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