In other words, the short-term capital gains for the current year of Rs 21,007 would be taxable while the long-term capital loss of Rs 15,200 (Rs 1,21,502 less Rs 1,06,302) can be carried forward and set off against the long-term capital gains of the succeeding years but within eight assessment years immediately succeeding the assessment year in which the loss was first computed.

Query

Can loss under the head capital gains, being short-term or long-term, be set off against salary income or income from other sources such as interest income?

C. J. Kotcher

Reply

A loss under the head capital gains can be set off only against income under the same head, as stated in the earlier query. It would not be possible to set off a loss, be it short term or long term, under the head capital gains against income from other heads. A loss under other heads may, however, be set off against capital gains.

Query

I am a temporary faculty for the last five years in a private college, which is run by a trust. I receive remuneration from the college as lumpsum, but the same is paid as honorarium on my signing vouchers and not given in the form of salary. Can I claim the standard deduction against such honorarium?

N. V. Jain

Reply

Standard deduction is allowable as a deduction in computing income under the head `salaries'. Income is chargeable under the head salaries in respect of such sums received from an employer, a former employer or for, and on behalf of, an employer. In the instant case, there is supposedly no employer-employee relationship, as the questioner is only a temporary faculty. The employer probably does not want to create such a relationship.

The income received by way of honorarium will, therefore, be chargeable as income under the head `profits and gains of business or profession'. Under this head, the questioner can claim as a deduction all expenditure incurred wholly and exclusively for business or profession apart from certain other deductions, which are permissible in computing the income.

Query

In your reply to a query that appeared in these columns on July 6, 2003, you had stated that the rebate for senior citizens is Rs 15,000. Has is not been increased to Rs 20,000 with effect from the assessment year (AY) 2003-2004?

R. V. Chandramouli

Reply

Section 88B provides for rebate to any individual resident in India who is 65 years or more at any time during the previous year. The rebate is 100 per cent of the income-tax or Rs 20,000, whichever is less, and is effective from the AY 2004-2005. For the AY 2003-2004, the rebate is up to a maximum of only Rs 15,000.

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