A taxable ‘capital loss’ (i.e., a transaction on which there is a liability to pay tax if the result were ‘gains’ instead of ‘loss’) can be set-off only against ‘capital gains’. An exempt capital loss (i.e., a transaction which is exempt from tax if the result were ‘gains’ instead of ‘loss’) cannot be set-off against taxable capital gains. A taxable long-term capital loss can be set-off only against long-term capital gains. However, a taxable short-term capital loss can be set-off against both short-term and long-term capital gains.
Disclaimer: The Hongkong and Shanghai Banking Corporation Limited in India (HSBC) has issued this note. This note is for general information only and is not meant to constitute and therefore should not be construed as an advice on tax matters. Prior professional tax advice analyzing individual facts and circumstances should be sought before taking any decision. As the tax laws keep changing by virtue of amendments in law, issue of administrative circulars and notifications and court rulings, there can be no assurance about the validity of the tax information contained in this publication subsequent to its release. No obligation or liability of any nature whatsoever is assumed by HSBC in releasing this publication. Whilst reasonable care has been taken in compiling the information, HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness.
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