I work in an information technology company. In 2011-2012, I suffered a loss of more than Rs 1 lakh in the share market. Can this short-term loss be adjusted with tax which I have paid already? If not, can I carry forward this loss by declaring it this year and adjust it against next year’s tax ?

Sanjay Pal, Calcutta

You can’t adjust the short-term capital loss against the tax that you have paid on income from salary or other sources. Short-term capital loss has to be set off against short-term capital gain. However, you can carry forward any excess capital loss (short-term) to be set off for up to eight subsequent years. Also, remember that the sale of stocks and funds is on a first-in-first-out basis. This means the shares you bought first will be deemed to have been sold first. You will not be allowed to carry forward the loss if your holding period exceeds one year. It will be seen as long-term capital loss. Since there is no tax on long-term capital gains from stocks, there is also no provision to carry forward the long-term capital losses from this asset class.

No permission required

When an employee wants relief under Section 89, is it compulsory to get permission from the assessing officer? If yes, when and how can one get the permission?

Pramit Saha, Calcutta

If salary is received in arrears or in advance, or receives profit in lieu of salary, it can be spread over the years to which it relates and be taxed accordingly under Section 89(1). There is no such requirement of getting any permission of the income tax assessment officer to claim relief under the said section. But, you first need to do self-assessment and the tax return has to be filed within the due date.

Clubbing logic

Will the taxable income of a minor, whose parents have died, be clubbed with his grandfather with whom he stays?

Amulya Ratan Bhattacharyya, Hooghly

der Section 64(1), if the minor is an orphan, his income will not be clubbed with anyone. It will be taxable in his hands only. However, the return of income can be filed by the grandfather on behalf of the minor.

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.