Adjustment of Short Term Capital Gain/Loss pre and post 23.07.2024

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Rajiv Gupta

Others

78 Points Posted on 20 January 2025

I have Short Term Capital Gain on listed securities of about Rs. 4 lakh from 01.04.2024 to 22.07.24 which is taxable at 15%. I also have Short term capital loss on listed securities of about Rs. 1 lakh from 23.07.2024 till date. Now can I adjust this loss against the gains although the tax implications are different? Or I pay tax on Rs. 4 lakh gain and carry over loss of Rs. 1 lakh? Clarity in the matter is requested.

Replies (3)

Quick Summary

This discussion clarifies the adjustment of short-term capital losses (STCL) against short-term capital gains (STCG) under Indian tax law. Even if the loss occurs after a specific date (22.07.2024) and the gain occurred before, the STCL can be offset against the STCG. This reduces the net taxable gain, leading to a lower tax liability. The query also touches upon the practical aspect of reporting these adjusted figures in tax returns, specifically regarding quarterly segregation.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 20 January 2025

To clarify, you're asking about adjusting the short-term capital loss against the short-term capital gain, considering the different tax implications.

Short-Term Capital Gain (STCG) You have a STCG of ₹4 lakh from 01.04.2024 to 22.07.2024, taxable at 15%.

Short-Term Capital Loss (STCL) You also have a STCL of ₹1 lakh from 23.07.2024 till date.

Adjusting STCL against STCG As per the Income Tax Act, 1961, you can adjust the STCL against the STCG, regardless of the different tax implications.

Tax Calculation After adjusting the STCL against the STCG:

1. _Net STCG_: ₹4 lakh (STCG) - ₹1 lakh (STCL) = ₹3 lakh

2. _Tax liability_: 15% of ₹3 lakh = ₹45,000 Carry Forward of Loss Since you've adjusted the entire STCL against the STCG, there's no remaining loss to carry forward.

Important Considerations .

Maintain documentation_: Keep records of the STCG and STCL transactions, as well as the tax calculations. By adjusting the STCL against the STCG, you can reduce your tax liability. Ensure accurate tax calculations and documentation to support your tax return.

Manoj Sharma

22 Points Posted on 17 July 2025

Your reply as above is very clear that the STCL after 22.07.24 can be adjusted against STCG upto 22.07.24.

But at the time of quarterly segregation of STCG in ITR, negative figure is not accepted for transactions after 22.07.24.

Please clarify how we should report quarterly segregation in ITR.

Aashok Kumar Sharma

Finance/Compliance Consultant

71241 Points Posted on 06 November 2026

Set-off works in your favour:

• Sec 70(2): short-term capital loss can be set off against any capital gain, short-term or long-term. The law doesn't fix the order among gains taxed at different rates.

• So you can set the post-23 July 2024 STCL (Rs 1 lakh) against the pre-23 July STCG taxed at 15%, or against the post-23 July STCG taxed at 20% (Sec 111A as amended).

• The ITR-2/3 utility (Schedule BFLA/CYLA) generally sets losses first against the gains taxed at the higher rate (20%), then lower, which is beneficial. If the utility doesn't, you may manually allocate the set-off in Schedule CYLA.

• Tribunals have held that the assessee may set off losses in the manner most beneficial (e.g. against higher-taxed gains first), since the Act doesn't prescribe the order.

• Unabsorbed STCL is carried forward 8 years (Sec 74). It can be set off against STCG or LTCG in future, and the return must be filed by the due date (Sec 80).