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Adjustment of long term capital loss with short term capital gains

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Somesh Tandon

22 Points Posted on 18 February 2023

Hello

Please guide if we can adjust LTCLoss with STCGain. For eg. if i have made a LTCLoss of Rs.10.lakhs in the current financial year and a STCGain of Rs.6.lakhs then will it be adjusted with each other and i can carry forward a loss of Rs.4.lakhs for future years. OR is it not adjustable with each other and I have to pay tax on the STCGain and the full LTCLoss gets carried over to be adjusted only against LTCLoss in future years. Thank you

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Quick Summary

This discussion clarifies the rules for adjusting capital losses against capital gains. Specifically, it addresses whether a long-term capital loss (LTCL) can be offset against a short-term capital gain (STCG). The guidance provided states that, according to Section 74 of the Income Tax Act, long-term capital losses can only be set off against long-term capital gains. Therefore, you cannot adjust your LTCL against your STCG.