Hello Experts,
I would like t have your opinion here.
Can we set off the Long term Capital Loss on sale of Equity shares sold in the previous years against the Long term Capital gain on sale of Residential Plot for the current year?
Shares were sold in the FY 2018-2019.
Regards,
mg
Under the traditional Income Tax Act, 1961, long-term capital losses can only be set off against long-term capital gains. However, beginning in tax year 2026–27, the new Income Tax Act, 2025, allows brought-forward long-term capital losses (incurred up to March 31, 2026) to be set off against both long-term and short-term capital gains. Always ensure your original tax return was filed by the due date to remain eligible for carry-forward.
The current year's LTCG (from long-term capital gains) can be used to offset against LTCL carried forward from previous years. However, under the Income Tax Act, LTCL can only be set against LTCG and NOT STCG (from short-term capital gains). The unabsorbed LTCL can be carried forward and claimed for up to 8 assessment years, if you file a return of loss within the due date.
Example:
B/F LTCL ₹3,00,000
LTCG for the Current Year ₹2,20,000
You can use all of the current year LTCG of ₹2,20,000 to offset against your B/F LTCL of ₹3,00,000, resulting in a B/F balance of ₹80,000.
In other words, the assessee's claim for set-off against the carried-forward LTCL will generally be permitted, as long as he has an appropriate/valid record(s) of carrying forward the LTCL.
CCI
Pro
CAclubindia
