Set off of short term capital loss on shares

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Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2015 hi, Pls advice if we can set off short term capital loss on shares against long term capital gain on Land

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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08 July 2015 no, as speculative loss can be set off against speculative income only.

Rupesh Jain

Rupesh Jain (Expert)
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08 July 2015 NO ITS NOT POSSIBLE...............

Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2015 It is not speculative loss. It is loss on normal stt paid shares. Knidly advice why No or why yes.

Asha Kanta Sharma online

Asha Kanta Sharma online

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25 July 2025 Got it! Let’s clarify this important point about **set-off of short-term capital loss on shares** against **long-term capital gains on land**.

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### **Key Point:**

* **Short-term capital loss on shares (equity shares on which STT is paid)** is treated as a **capital loss**, **NOT** as a speculative loss.
* Such losses can be set off **only against capital gains** (both short-term and long-term), **not against any other income** like salary or business income.

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### **Can short-term capital loss on shares be set off against long-term capital gain on land?**

**Yes, it can.**

* Since **both are capital gains/losses**, even if one is short-term loss (shares) and the other is long-term gain (land), the Income Tax Act allows the **set-off of capital losses (short-term or long-term) against any capital gains (short-term or long-term)**.
* **Section 74** of the Income Tax Act covers set-off of capital losses against capital gains.

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### **Why some say "No"?**

* Possibly confusion arises because of **speculative loss rules**.
* But **loss from sale of equity shares where Securities Transaction Tax (STT) is paid** is treated as **non-speculative capital loss**, not speculative loss.
* **Speculative loss** (like loss from intraday trading) can only be set off against **speculative income**.
* Since your loss is on **normal delivery shares with STT paid**, it is **normal short-term capital loss**, hence can be set off against any capital gains.

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### **Summary:**

| Loss Type | Can be set off against Long-term Capital Gain on Land? |
| ------------------------------------------------- | ------------------------------------------------------ |
| Short-term capital loss on shares (with STT paid) | **YES** |
| Speculative loss (intraday trading) | **NO** (only against speculative income) |

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### **In your case:**

* Since your **short-term capital loss is on shares with STT paid**, it **can be set off against long-term capital gain on land**.

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If you want, I can also help you with the relevant sections of the Income Tax Act or case laws for deeper reference. Just ask!

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