NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)
A PMS client has a short-term capital loss of Rs 2,00,000 on equity shares in a financial year. Which treatment is correct for set-off?
A short-term capital loss can be set off against both short-term and long-term capital gains in the same year. It cannot be set off against salary or other heads of income. Any unabsorbed loss may be carried forward for eight assessment years.
- AIt can be set off only against short-term capital gains
- BIt can be set off against both short-term and long-term capital gainsCorrect
- CIt can be set off against salary income
- DIt can be set off against any income but only for that year
Explanation
A short-term capital loss can be set off against both short-term and long-term capital gains of the same year. It cannot be set off against other heads such as salary. Unadjusted loss can be carried forward for 8 assessment years.
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