BackBoth long- and short-term loss can be set off against long-term profit
Any unadjusted loss under the head capital gains, cannot be set off against any other income in the same financial year
PremiumI have short-term capital loss (STCL) of about ₹6 lakh and long-term capital loss (LTCL) of around ₹4 lakh from equity investing. I sold a flat and have long-term capital gains (LTCG) of ₹5.80 lakh or so. All of these were made in the current financial year. Will both LTCL and STCL be set off against LTCG and in what order?
—Arun Rodrigues
As per the provisions of income tax law, LTCL can be set off against LTCG. Further, STCL can be set off against both short-term capital gains (STCG) and LTCG. Accordingly, you will be eligible to set off both LTCL and STCL against your LTCG.
Any unadjusted loss under the head capital gains, cannot be set off against any other income in the same financial year (FY). You can carry forward the balance unadjusted STCL or LTCL for eight FYs immediately succeeding the current FY and set off against future STCG or LTCG, as prescribed.
It may be noted that the order for set-off of STCL or LTCL against LTCG has not been prescribed in law. However, practically, the income tax filing utility issued by the tax authorities for FY20 (as it stands today) seems to adjust STCL first against LTCG and then LTCL against LTCG.
If I want to claim income tax deduction on medical or preventive health insurance premium paid for my senior citizen parents under Section 80D, do my parents need to be financially dependant on me?
—S. Sayed
As per Section 80D of the Income-tax Act, 1961, deduction is available towards the amount paid on account of health insurance premium of any parent (who is a resident senior citizen), to the extent of ₹50,000 per annum.
There are no additional conditions prescribed under Section 80Dof the Act with respect to the parents being financially dependant on the taxpayer. Accordingly, irrespective of the fact whether your parents are dependant on you or not, a tax deduction can be claimed under Section 80D for the premium paid by you.
Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India
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