Offset of STCG against long term capital loss

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This discussion clarifies the rules for offsetting capital gains and losses. Short-term capital gains from debt mutual funds (held under 3 years) cannot be offset against long-term capital losses from equity mutual funds. Long-term capital losses can only be set off against long-term capital gains. Any remaining losses can be carried forward to future tax years.

Ashit Malhotra

Ashit Malhotra (Querist)

29 April 2020 I sold my debt Mutual Fund after 2 years and 3 months for a gain of say Rs 100000/- this gain will be considered as short term capital gain. If I sell an equity MF after 1 year for a loss of say Rs 95000/- which would be a long term capital loss.
1.My query is can these two be offset against each other giving me a net income of Rs 5000 .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 April 2020 No, Long Term Capital Loss can be set off only against Long Term Capital Gains. Carry forward the loss to next year.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

09 May 2020 I think Debt mutual funds needs to be held for more than 36 months to be considered for considering Long term Capital. You must be invested for 3 years. In you case both are short term capital gain and loss.

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