Let’s say a person has 1 lakh dividend income, 1.5 lakh FnO losses and 1 lakh equity STCG, and 25000 “other income” .
What will be order of loss set off ?
F&O losses can be set off against any income except salary
Your net income in this case shall be 75K:
2.25 lks (Dividend + STCG + Other income)
Less: 1.5 lks (F&O Losses)
= 75k
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Hey @raghav.95,
The F/O losses will be set off against the dividend and other incomes first. The remaining losses will then be set-off against your STCG.
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Hi @Quicko
Last year I had net f&o loss ~5 lac but I did not report it in my ITR. Actually I filed ITR-1.
Is there anyway I can set off previous year’s loss with this year’s profit (~1Lac)?
This year I’m planning to file ITR-3.
Thanks
Hey @Shivam_Gupta,
In order to carry forward your losses, it is mandatory to report them in the relevant AY and file the ITR before the due date. However, if the losses were not reported, you cannot set them off against income in FY 23-24.
STCG loss can set off against FNO profit ?
Hey @bharat1080,
No, short-term capital losses can only be set off against short-term and long-term capital gains.
Even if the entire loss is still not offset by dividend, other income and STCG, will it get offset against LTCG also?
hi by F&O losses u mean both intraday & longterm F&O
Hey @drsennath,
Any kind of F&O trading including intraday goes under non-speculative business and these losses can be adjusted against all incomes except salary in the same financial year.
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Hey @nishant9119,
Yes, F&O losses will set-off against LTCG in the same year.
Say you have F&O losses of ₹ 60,000 and doesn’t have any other income (except salary and Equity LTCG of ₹ 80,000). Now LTCG of ₹ 80,000 is already exempt (< 1 lacs) and no tax is payable. However, your F&O loss of ₹ 60,000 will get offset against LTCG and your entire loss will be set off and you won’t be able to carry forward the same. Is it a Income tax portal glitch/bug or it’s as per rules? @Quicko
hi @Quicko
I have few question for setoff of losses
- Is stocks intraday profit and losses are speculative or non speculative? and can the losses of fno can be setoff from stocks intraday profit and also vice versa?
- can stocks intraday losses can be setoff from all of the incomes? except salary income,?
- Stocks Intraday profit and losses are considered speculative in nature, whereas profit and losses of F&O are considered as non-speculative in nature.
- Intraday losses (speculative) can be offset against speculative income only (and not f&o or salary income), however you can carry forward your losses. Whereas, f&o losses can be offset against any other income (Interest, dividend, STCG,LTCG) except salary and again balance loss can be carried forward.
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Hey @Prashant_Kumar4,
Intraday trading is considered speculative business income. Moreover, F&O losses can be set-off against profits from intraday trading.
No, speculative losses can only be set-off against speculative gains.
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Hey @nishant91191,
This is as per the rules. Your losses will be first set off and then exemptions will be available on the remaining income.
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- if my loss from options is 4 lakh and income from other sources like teaching, internship (not salary) is 3.5 lakh, is it mandatory to setoff these two or we can also carry forward fno losses to next year and show 3.5 lakh income as in new tax regime have no tax till 7 lakh income, so that loss of fno can help to setoff from next year fno profit or other.
- in new tax regime ltcg and stcg have flat tax rate to pay mandatorily even if our income don’t cross 7 lakh? for example my income is 5 lakh and stcg of 30k , which is below 7 lakh but on 30k do i need to pay tax@15%? or only if it crosses 7 lakh
please let me know, thanks
Hey @Prashant_Kumar4,
The losses will get set-off first against your gross income and then the tax liability will be determined.
Yes, this was a recent change made by the income tax department. LTCG was already not allowed for the rebate, however, now STCG is also not eligible. Hence, both of these will be taxed at a flat rate.