Dear Sirs,

My student, a resident in India, has some interest and dividend incomes and substantial capital losses (if his holdings are valued at current market prices) from a small portfolio of international stocks and bonds held by him. These stocks and bonds were purchased by him when he was a NRI and have been held by him since.

How is his tax liability to be worked out ? Can he set off the incomes against the erosion in value of his holdings ? What is the best way for him to plan his income taxes ?

Admin’s Response:

Losses on account of holdings long term or short term cannot be set off against interest or dividend incomes. These can be set off only against short term/long term gains in current year or subsequent period of up to eight years depending upon the type of loss and the period of holdings.