Income tax query

[Sebastian cs]

Sir, if i invest say 1 lakh a month from a salary of say 2 lakh from april 2017 to jan 2018 i.e in a period of 10 months i have invested 10 lakhs from my income of 20 lakhs and as of march 2018 the investment has lost its value and is about only 2 lakhs (i.e i have lost 8 lakhs) so would i have to pay Income tax for the entire 24 lakhs i earned or would i have to pay for 16 lakhs that i have??

[Hari Beldona]

As there is no transfer of capital asset i.e investment of. RS 10 lakhs hence there is no capital gain/loss and such loosing of value cannot be setoff as per section. 72. You have to pay tax on entire 24 lakhs under salary income

[Ganeshan Kalyani]

Yes, entire amount is taxable.

[Nash Industries I Pvt Ltd]

Under salary there is a limit on all exemptions. However tax is payable on entire amount of salary.

Investment (others) may be under a different head of income (capital gains) and the same cannot be set off against salary income.

Regards

S.Ramaswamy

[Ganeshan Kalyani]

Yes , Sir. I agree.

[Sebastian cs]

Thank you sirs you all have been a great help!!

AI Summary

Taxability of salary: full salary remains taxable even when investments held from salary suffer unrealized loss.
Salary income remains fully taxable despite an unrealized decline in investments; market value diminution of holdings that have not been transferred does not generate a deductible loss against salary, and loss recognition/set off arises only upon transfer or disposal under the rules applicable to other heads of income.