I have invested in Fixed Maturity Plans of durations of more than one year. I have also incurred Short-Term Capital Loss from redemption of units of Equity Mutual Funds in the current year. I wish to know if this Short-Term Capital Loss can be set off against my income from the FMPs. If yes, will I be able to claim the indexation benefit on the FMP before setting off the Short-Term Capital Loss?
-Nitin Aggarwal
According to income tax regulations, short-term capital loss can be set off against both short-term capital gain as well as long term capital gain. So, you can avail this benefit to square off your losses. You can also take advantage of indexation on the gain on FMP to reduce your tax burden before setting off your short-term capital loss.
This article was originally published on December 02, 2008.
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