Under Section 112, the tax on LTCG is to be computed at 20 per cent of the capital gain so computed in accordance with Section 48. The assessee, however, has an option of taking 10 per cent of the gain computed before giving effect to the provisions relating to indexation to be the tax on LTCG if such gain is from the transfer of listed securities or units.

Considerable doubt does exist on whether the loss computed with the benefit of indexation can be set off against the gain arising and which is computed with the benefit of indexation.

This doubt arises primarily because Section 112, which permits the person to take 10 per cent of the gain computed without the benefit of indexation, comes after the provisions relating to set-off and carry forward and does not refer to allowing the benefit.

It is felt that an interpretation that such set-off cannot, or should not be, made is not right; that such set-off should be made seems to be the better one. This is so for Section 112, which seeks to allow an assessee to take 10 per cent of the gain computed without indexation as the tax payable. It is meant to be a beneficial section and should not be interpreted to put an assessee at a disadvantage.

Further, it is a well-settled rule of interpretation that the entire statute should be read as a whole and the same has to be considered thereafter chapter by chapter, section by section and finally word by word.

In answering this query it is presumed that the basic exemption has already been exhausted by other incomes earned by you in the previous year.

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