ITR2: Set Off Long Term Capital Losses

This query is : Resolved

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This discussion addresses a query about filing ITR2 for FY 20-21, specifically concerning the set-off of brought forward long-term capital losses against long-term capital gains (LTCG) in equity. The user is unsure whether to claim the Rs 1 lakh LTCG exemption before or after setting off losses. It's clarified that the ITR2 utility automatically sets off losses first, and then applies the exemption to any remaining gains, which the user should accept.

Dhruvin Parikh

Dhruvin Parikh (Querist)

08 December 2021 I have long term capital gains in equity for FY 20-21 of Rs 3 lakh.
I have brought forward equity long term losses from previous year of Rs 5 lakhs.
Question- For filing returns of FY 20-21, do I have to first setoff capital losses against capital gains? Or can I first take LTCG exemption of Rs 1 lakh and then setoff remaining 2 lakhs gains against prev year losses?
If I first setoff losses against gains, then I am not able to take advantage of LTCG exemption of Rs 1 lakh.
Please guide.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 December 2021 Fill ITR it will provide 1 lac exemption automatically.
Then you set off brought forward loss.

Dhruvin Parikh

Dhruvin Parikh (Querist)

09 December 2021 Sir,
ITR2 utility automatically sets off losses first and then provides exemption only if any gains are left after setting off..
How should I handle this?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 December 2021 It's software program you can't handle it.
Accept the adjustment.

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