Schdule BFLA and CFL Error regarding adjustment of Losses

I have Short and Long term capital gains and also Prevoius year short and Long term  Losses. While efiling online ITR 2, I find that current year LTCG  amount  is setoff by Short term Losses brought forward  in Schedule BFLA automatically.

Because of this, Schedule CGL shows wrong and reduced Balance of Short term loss to be carried forward.

Also this wrong setting off of STCL with LTCG in BFLA has made my LTCG Tax Nil instead of around  Rs 20000 actual Tax payable by me on LTCG.

All these are made by system and I cannot manually change them. Please guide me how to correct and file the Return?

chandar

Replies (2)
Quick Summary
This discussion addresses an issue with the online ITR-2 filing system where Short Term Capital Losses (STCL) are incorrectly set off against Long Term Capital Gains (LTCG) in Schedule BFLA. This leads to an inaccurate calculation of capital gains tax and the amount of loss to be carried forward. The advice provided suggests using the offline ITR-2 utility to manually correct the set-off or raising a technical grievance with the e-Filing Helpdesk if online filing is mandatory and uneditable. There's also a query about whether STCL can indeed be set off against both STCG and LTCG, which requires clarification based on tax rules.

According to the Income Tax rules, Short Term Capital Loss (STCL) can only be set off against Short Term Capital Gains (STCG), and Long Term Capital Loss (LTCL) can only be set off against Long Term Capital Gains (LTCG). The system’s current automatic adjustment of STCL against LTCG in Schedule BFLA is incorrect and is likely a portal bug.

To correct this:

  1. Use the offline ITR-2 utility (Excel/Java) from the Income Tax portal, enter your capital gains/losses in the correct schedules, and manually adjust the set-off in Schedule BFLA before generating and uploading the JSON file.

  2. If you must file online and the system doesn’t allow edits, raise a technical grievance through the e-Filing Helpdesk, clearly stating the issue and attaching screenshots.

This will ensure the correct carry-forward loss is shown in Schedule CGL and the correct LTCG tax liability is calculated.


If you want, I can also make a LegalDev-branded short advisory version that feels like a professional CA note for your website or email reply.

I am informed from few sources that STCL on shares can be adjusted as setoff from Both STCG and LTCG where as LTCL can only be setoff from LTCG. If so, then what system has done must be correct only. Please check and confirm.

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