Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)

A resident individual's PMS account has realised short-term capital loss of Rs 2,00,000 on listed equity and long-term capital gain of Rs 3,50,000 on other listed equity shares in the same year. Ignoring exemption limits and surcharge, what is the net capital gain figure after the permitted set-off?

The net figure is a long-term capital gain of Rs 1,50,000. A short-term capital loss can be set off against long-term gains, so Rs 3,50,000 less Rs 2,00,000 leaves Rs 1,50,000 chargeable.

  1. ARs 1,50,000 net long-term capital gainCorrect
  2. BRs 5,50,000 net long-term capital gain
  3. CRs 2,00,000 short-term loss carried forward with the gain fully taxed
  4. DRs 3,50,000 net long-term capital gain

Explanation

A short-term capital loss can be set off against both short-term and long-term capital gains. Net = 3,50,000 - 2,00,000 = Rs 1,50,000 long-term gain. Option B adds instead of subtracting. Option C wrongly says that a short-term loss cannot be set off against a long-term gain, and option D ignores the loss altogether.

Did you get it right without looking?

One question tells you little. A timed set on Taxation (NISM XXI-A) shows your real accuracy, how long you take and where you lose marks.

Practise Taxation (NISM XXI-A)Free diagnostic mock

More Taxation (NISM XXI-A) questions