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CA Intermediate · Taxation · Capital Gains

For the tax year 2026-27, Priya has these results: short-term capital gain on listed equity shares ₹1,50,000; long-term capital gain on a plot of land ₹90,000; short-term capital loss on unlisted shares ₹1,20,000; long-term capital loss on jewellery ₹1,30,000. What is the net capital gain chargeable to tax, before any exemption limit, and what happens to the unabsorbed loss?

₹30,000 is chargeable, with a long-term capital loss of ₹40,000 carried forward. Long-term losses can be set off only against long-term gains, so the ₹1,30,000 loss wipes out the ₹90,000 long-term gain and leaves ₹40,000. The short-term loss reduces the short-term gain to ₹30,000.

  1. A₹30,000 chargeable; long-term capital loss of ₹40,000 carried forwardCorrect
  2. BNil chargeable; long-term capital loss of ₹10,000 carried forward
  3. C₹1,10,000 chargeable; short-term loss carried forward
  4. D₹50,000 chargeable; long-term capital loss of ₹40,000 carried forward

Explanation

A long-term capital loss can only be set off against long-term gains. So 90,000 − 1,30,000 leaves a long-term loss of ₹40,000 to carry forward, and long-term gain becomes nil. Short-term loss can be set off against any capital gain, so 1,50,000 − 1,20,000 = ₹30,000 is chargeable. Option B wrongly sets the long-term loss off against the short-term gain.

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