Loss under capital gains

It is of 2 types

  • STCL (Short Term Capital Loss)
  • LTCL (Long term Capital Loss)

 

STCL [Short term capital loss]

  • It can be adjusted against both STCG / LTCG in current year
  • However, no inter head adjustment allowed.
  • Balance is carry forward for 8 more years
  • In future years it can be adjusted against LTCG or STCG 

 

Example 1

Particulars Amt
Income from Salaries 300000
LTCG/(LTCL) 30000
STCG/(STCL) -40000
TOTAL 290000
View Answer

 

 

LTCL (Long term capital loss)

  • It can be adjusted against LTCG only in current year( It cannot be adjusted against STCG)
  • No inter head adjustment allowed
  • Balance is carry forward for 8 more years
  • In future years it can be adjusted against LTCG only

Hence.,

STCL can be adjusted against both STCG and LTCG 

but

LTCL can be adjusted against LTCG only

 Example 2

Particulars Amt
Income from Salaries 300000
LTCG/(LTCL) -50000
STCG/(STCL) 30000
TOTAL 280000
View Answer

 

Note:-

Long term Capital loss on shares is a dead loss.It cannot be carry forward in future period

This is because Long term capital gain income is exempt.Since its income is exempt, its loss also has no treatment

  1. Income Tax
  2. Set off and Carry Forward of Losses
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.