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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Accounting and Taxation

A trader has a non-speculative business loss of Rs 80,000 from Nifty options in a financial year and has salary income of Rs 12,00,000. Which statement is correct?

A non-speculative business loss from options cannot be set off against salary income. It may be carried forward for up to eight assessment years and set off against business income, provided the return of income is filed within the due date.

  1. AThe loss can be set off against salary income in the same year
  2. BThe loss cannot be set off against salary income but can be carried forward for up to 8 assessment yearsCorrect
  3. CThe loss lapses at the end of the year
  4. DThe loss can be carried forward only for 4 years

Explanation

Non-speculative business loss cannot be set off against income under the head salaries. It can be set off against other heads such as capital gains or other income only as permitted, and unabsorbed loss is carried forward for 8 assessment years, provided the return is filed on time.

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