CAN PROFIT IN STOCK(DERIVATIVE) US MKT BE OFFSET WITHC/F LOSSES IN DERIVATIVE INDIAN MKT

[satinder chadha]

X is an Indian  proprietary concern which has c/f losses in Indian derivative market .  X trades in United States derivative market as an individual and has profits. Can X offset his proprietary concern derivative losses with profits from individual account in derivative trading in USA?

[Deepak Nagori]

Dear Satinder,

Income tax Act does not make any distinction for profits / losses in India or in foreign countries for residents. So assuming X is a resident, he can offset the losses in India from profit in foreign country. Also derivative transactions are not speculative transactions u/s 43(5). Hence b/f losses upto 8 years before are eligible for set off against the foreign profits.

Regards

CA Deepak Nagori

[satinder chadha]

Thank you sir.I am overwhelmed by  the pain you have taken to answer the question.Thank you sir  once again.

AI Summary

Cross-border derivative loss set-off: resident can offset domestic carried forward derivative losses against foreign derivative trading profits.
For a resident taxpayer, Indian tax law permits carried forward losses from domestic derivative trading, which are treated as non speculative under section 43(5), to be set off against profits earned from derivative trading abroad, subject to the statutory carry forward period and the usual conditions for claiming set off.