Capial gain

Originally posted by : Priya
	capital gain under section 10(38) = 5000 capital loss under section 10(38) = 2000 what is the amount exempt under section 10(38)? Do we net off the two and the capital gain exempt is 3000 or is it 5000 exempt and 2000 is to be ignored?? there will be no difference in the tax effect but just wanted to know for exam purpose...

Rs. 5000 will be exempt and Rs. 3000 will have no treatment. There will be no set-off. This is because set-off can be made only against taxable income and of taxable loss. Since, in your query, there is neither taxable income nor taxable loss, so no question of set-off. 

Under sec:10(38) of Income tax act,Capital gain on sale of shares  held for than 12 months is exempt ,if the shares are listed on a stock exchange of india

So in your query there is no taxable capital gain , therefore no question of set off arises