Can we set off Long Term Capital Loss on sale of listed shares against Short Term Capital Gain

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Aviral Jain

1 Points Joined February 2020

I have 2 lakhs Long Term Capital Loss against losses made on sale of shares of listed company and 3 lakhs Short Term Capital Gain against profit made on sale of shares of listed company. Need help on below 2 questions:

1. Can the Long Term Capital Loss be used to set off Short Term Capital Gain?

2. If not, can Long Term Capital Loss be carried forward to next year for adjusting against potential Long Term Capital Gain of subsequent year?

Replies (2)

prasad Nilugal

GST Practitioner & Accounts

15022 Points Joined March 2014

1) You can not set off Long Term capital loss against Short term Capital Gain . please refer section 74 of Income Tax act 1961

2) you can carried forward long term capital loss up to 8 years to adjust against long term capital gain , However return of loss must be filed in time .

please confirm with others also.

Kapadia Pravin

17264 Points Joined December 2018

Loss from transfer of a short term Capital Asset can be set off against gain from transfer of any other capital asset (Long Term or Short Term) in the same year.

Loss from transfer of a Long term Capital Asset can be set off against gain from transfer of any other long term Capital Asset in the same year.

You can definitely carry forward of long term or short term capital loss to the extent not absorbed and very well set off in next or subsequent years.