NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Ms. Neha Kulkarni, a resident individual, sold listed equity shares (STT paid) held for 3 years for Rs 7,00,000. Cost was Rs 5,00,000. In the same year she had a short-term capital loss of Rs 50,000 from other listed shares. Which statement is correct about setting off this loss?
The short-term capital loss can be set off against the long-term gain in the same year. Short-term losses may be set off against any capital gain, not salary, and unabsorbed losses can be carried forward for eight years.
- AThe short-term loss can be set off against the long-term gainCorrect
- BThe short-term loss can be set off only against salary income
- CThe short-term loss is lost immediately and cannot be carried forward
- DThe short-term loss can only be set off against future short-term gains
Explanation
A short-term capital loss can be set off against both short-term and long-term capital gains in the same year. So the Rs 2,00,000 gain reduces to Rs 1,50,000 before exemption. It cannot be set off against salary, and any unabsorbed amount can be carried forward for 8 years.
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