LTCG/ STCG Set Off

Taxation
1

My LTCG is about 86K and my Short Term Capital Loss is about 87K- thus, Quicko is setting Short Term Capital Loss against LTCG. Is there any way to carry this Short Term Capital Loss forward since LTCG would not invite tax anyway (<1 lac).

2

The order goes this way.

  1. Set off under same head of income.
  2. Set off under other heads of income.
  3. Balance if any, carry forward to next AY under same head of income.

So answer to your question. No.

2 Likes
3

Did not understand. I have similar query like the author

  1. Setting off under the same head of income - He has loss of 87K STCL
  2. Set off under other Head of Income - LTCG is 86K. So the loss can be offset against LTCG.
  3. Carry forward to next AY - NiL

So when can I use the exemption of 1 lack.
Is it under this scenario
STCL - 86K, LTCG - 186K
86K gets adjusted to 186K and net 1 lack gets the exemption. Is my understanding correct.

Please clarify @Jason_Castelino

4

yes, must be after the 1L exemption because that doesnt have any strings attached.

Also,
Long-term capital loss cannot be set off against any income other than income from long-term capital gain . However, short-term capital loss can be set off against long-term or short-term capital gain.

5

1k loss can be carried forward.

Yes. Here you will get the benefit of 1lakh exemption.

6

just to add one more scenario

So when can I use the exemption of 1 lack.

STCL - 139K
LTCG - 735K
Brought forward of previous loss in LTCG 456K

139 gets deducted from 735K = 596.
BF losses of previous year gets deducted from 596. Net = 140K

Will 1 lack gets deducted from this and tax liability should be 40K.

7

Exactly

1 Like
8

Small correction. Taxable income is 40k. Tax liability will be 10percent of that. But I believe that’s what you meant.

1 Like
9

And to show-off a little bit: :smiley:

This is another common mistake ppl make and see mismatch in their calculation vs in some tax portal. Was explaining to my relative couple of weeks ago. Already 1L is given, why you want more ? :stuck_out_tongue:

Rebate under Section 87A cannot be adjusted against tax on LTCG of equity-oriented funds (Section 112A).