By calculating the tax present in the receipt we can find out if the capital assets are less than the cost of acquisition be it indexed or not. And this is how you can understand whether it is a capital loss and not a capital gain. Now, the capital gains are taxed depending on the type of assets that is long term or short term. Let us understand how short term capital loss can be set off against.
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To understand how to set off of short capital loss let us learn about the conditions for taxation of capital loss:
There must be a transfer of capital assets.
If there is a transfer of assets, there should also be a loss.
Short term capital gains can be set off against both long term and short term capital gains. If you cannot set off the amount entirely in one fiscal year, you can carry forward it for 8 upcoming assessment years immediately after the assessment year when the loss was first computed.
To track the loss, you must file your income tax every year. In case you forget to file your tax, you won't be able to carry the losses for the upcoming years. Therefore, even though it's a loss return you do not have to show anything, you should always file your tax and be safe.
For long term capital loss, you can also carry forward it to the upcoming 8 assessment years. I hope you understand how short term capital loss can be set off against now.
Read more:
What Is Short Term Capital Asset?
How To Calculate Capital Gains Tax? What Is Long Term Capital Gains Tax?Your Feedback Matters! How was this Answer?
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Short term capital loss can be set off against
Hema
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2022-05-09T10:49:56+00:00 2022-05-10T11:29:40+00:00Comment
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