Loss carryforward and set off under new tax regime?

984 views 33 replies

I filed return online and I came back here to express special thanks to you. Without you it would be much more difficult to file return.

My Pleasure.                             

Capital loss carryforward and set-off is NOT affected by which income tax regime you choose.

The new tax regime vs old tax regime choice only affects deductions under Chapter VI-A (like 80C, 80D, HRA) and certain exemptions. It does NOT restrict the following:

- Short-term capital loss (STCL) can be set off against both STCG and LTCG
- Long-term capital loss (LTCL) can be set off against LTCG only (not STCG)
- Both STCL and LTCL can be carried forward for 8 assessment years
- The carry-forward rules apply whether you are on the old regime or new regime

One update from the Income Tax Act 2025 transition (applies from AY 2027-28 onwards): LTCL incurred up to March 31, 2026 will carry transitional relief for set-off in future years. For your current AY 2026-27 return, the Income Tax Act 1961 rules apply.

Practical tip: if you have carry-forward losses from prior years, make sure you filed the ITR in the year the loss was incurred to preserve the carry-forward. A missed or belated return can extinguish your carry-forward right.

This [AIS health-checker guide for pre-ITR verification](https://taxgarden.in/blog/ais-health-checker-pre-itr-verification-guide-india) has a section on verifying prior-year loss carry-forward balances in the AIS before filing, which helps catch any discrepancies early.

Capital loss carryforward and set-off is NOT affected by which income tax regime you choose.

The new tax regime vs old tax regime choice only affects deductions under Chapter VI-A (like 80C, 80D, HRA) and certain exemptions. It does NOT restrict the following:

- Short-term capital loss (STCL) can be set off against both STCG and LTCG
- Long-term capital loss (LTCL) can be set off against LTCG only (not STCG)
- Both STCL and LTCL can be carried forward for 8 assessment years
- The carry-forward rules apply whether you are on the old regime or new regime

One update from the Income Tax Act 2025 transition (applies from AY 2027-28 onwards): LTCL incurred up to March 31, 2026 will carry transitional relief for set-off in future years. For your current AY 2026-27 return, the Income Tax Act 1961 rules apply.

Practical tip: if you have carry-forward losses from prior years, make sure you filed the ITR in the year the loss was incurred to preserve the carry-forward. A missed or belated return can extinguish your carry-forward right.

This [AIS health-checker guide for pre-ITR verification](https://taxgarden.in/blog/ais-health-checker-pre-itr-verification-guide-india) has a section on verifying prior-year loss carry-forward balances in the AIS before filing, which helps catch any discrepancies early.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
22 June 2026
Accountant

Global Image Technologies Private Limited

New Delhi

MBA

View Details
Company
ARTICLESHIP 11 July 2026
Article

SNCO

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 16 July 2026
Article Assistant

Sahil Agarwal & Company

Mumbai

CA Inter

View Details
Company
29 June 2026
ACCOUNTANT

SANDEEP AASHISH & CO

Araria

B.Com

View Details
Company
ARTICLESHIP 14 July 2026
Article Assistants

R Shyam and Associates

New Delhi

CA Final

View Details
Company
ARTICLESHIP 17 July 2026
Article Assistant and B.com pass

BANSAL YOGESH AND CO

Gautam Budh Nagar

B.Com

View Details
Company
20 July 2026
Senior GST Executive

Chandak Agarwal & Co

Mumbai

Graduate (Any)

View Details
Company
13 July 2026
AVP / VP - PCG Advisory

Workforce Connect

Mumbai

MBA

View Details