Loss carryforward and set off under new tax regime?

Quick Summary
This discussion clarifies that switching to the new tax regime generally does not prevent the carryforward and set-off of capital losses incurred under the old regime. While most capital losses remain unaffected, the conversation delves into specific scenarios like speculative trading losses and presumptive income, explaining how these should be reported and their limitations for set-off. It also covers the reporting of dividend income and presumptive income calculations.

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
ARTICLESHIP 24 August 2026
Chartered Accountant Articles

Rohit KC Jain & Co

New Delhi

CA Inter

View Details
Company
25 August 2026
Senior Accountant

MG Associates

New Delhi

CA Inter

View Details
Company
18 August 2026
Audit Assistant - Remote / Work From Home

CA ANOOP P K & ASSOCIATES

Kozhikode

CA Inter

View Details
Company
ARTICLESHIP 29 August 2026
Article Assistant

RRPM & ASSOCIATES LLP

Chennai

CA Inter

View Details
Company
11 August 2026
COMPLIANCE EXECUTIVE

YMW COMPLIANCE SERVICES LLP

Others

CA Final

View Details
Company
ARTICLESHIP 14 August 2026
Article Assistant

N J Suresh & Associates

Bengaluru

CA Inter

View Details
Company
19 August 2026
Chartered Accountant - Financial Consolidation & Reporting

Synergy Keystone

Mumbai

CA

View Details
Company
04 September 2026
CA inter Or ca finalist

A Jaiswal and company

Lucknow

CA Final

View Details