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LTCG Tax Liability even after 100% LTCG set off with BF LTCL

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Ajaykumar Chaudhary

Manager-Accounts

130 Points Posted on 22 June 2026

Dear Experts,

I have sold my property in FY 2025-26 which was purchased in FY 2022-23. I have a BF Long Term Capital Loss of Rs. 5 lakh appx. on immovable property. I have a LTCG of Rs. 3.86 lakh in FY 2025-26 on the property sold after indexation, improvement cost & transfer expenses. When I feed details in an online ITR for FY 2025-26, system forcefully consider New Tax Regime & calculate Tax @ 12.5% even though property purchase before 23.07.2024. As per this, I have to pay tax. I have calculated as per Old Tax Regime and as per OTR, I need not to pay any tax on LTGC because of BF LTGL of Rs. 5L settled against LTCG of the FY 2025-26 and I can CF balance loss also (5L - 3.86L = 1.14L).

How can I resolve this issue? Please guide me.

Replies (1)

Aashok Kumar Sharma

Finance/Compliance Consultant

62008 Points Posted on 22 June 2026

To resolve the issue, the taxpayer needs to explicitly opt out of the New Tax Regime (by selecting "Yes" in Personal Information for ITR-2 or filing Form 10-IEA first for ITR-3) to claim the 20% indexation benefit. Furthermore, to fix the tax calculation, they must fill Schedule CG, update Schedule CFL/BFLA, and click Compute to successfully set off the ₹3.86 Lakh gain against the ₹5 Lakh brought forward loss, reducing the net tax liability on this gain to zero.