Under the Income Tax Act, is it possible to set off capital gains and losses?
A
No, capital gains and losses cannot be set off.
B
Yes, it is possible to set off capital gains and losses.
C
Only capital gains can be set off against capital losses.
D
Only capital losses can be set off against capital gains.
Correct Option:
B
Explanation
Yes. Under the Income-tax Act, capital losses can generally be set off against eligible capital gains, subject to the applicable rules. Short-term capital losses can be set off against both short-term and long-term capital gains, while long-term capital losses can be set off only against long-term capital gains. Unabsorbed capital losses may also be carried forward for the prescribed period if the applicable conditions are met.
