Carry forward loss


(maheshkumar) #1

I sold many of my stocks and in total I lost 20% of my portfolio ,all short term loss .
Can I carry forward my loss

Please guide
Thanks
Mahesh


(Dinesh Sairam) #2

Refer to Page 4: https://www.incometaxindia.gov.in/Tutorials/21-%20MCQ%20set%20off%20and%20carry%20frwrd.pdf

Provisions under the Income-tax law in relation to carry forward and set off of
capital loss

If loss under the head “Capital gains” incurred during a year cannot be adjusted in the
same year, then unadjusted capital loss can be carried forward to next year.

In the subsequent year(s), such loss can be adjusted only against income chargeable to tax
under the head “Capital gains”, however, long-term capital loss can be adjusted only
against long-term capital gains. Short-term capital loss can be adjusted against long-term
capital gains as well as short-term capital gains.

Such loss can be carried forward for eight years immediately succeeding the year in
which the loss is incurred.

Such loss can be can carried forward only if the return of income/loss of the year in
which loss is incurred is furnished on or before the due date of furnishing the return, as
prescribed under section 139(1).


(maheshkumar) #3

Thanks a lot for the succinct explanation
Is the due date for income tax 31st march or is it different for stock market
This is my first year of investing


(Dinesh Sairam) #4

It’s the same. I don’t think there’s any special provision for Investments.


(maheshkumar) #5

Thanks a lot Dinesh ,ur information much appreciated


(Mohammed Rehan) #6

Does it mean short term capital loss carried forward from previous years to the year FY 18-19 can be used to set off long term capital gains from equity? I have short term losses from earlier years, This question arises since now long term gains are also taxable but at different rates.


(Dinesh Sairam) #7

Yes, that is true. STCL can be carried forward and offset with LTCG. I confirmed with a CA friend of mine as well.


(Madhurkotharay) #8

One question: STC loss CAN be carried forward and set off against LTCG. But is it compulsory to do so? Or can I choose to not set it off, instead preserving it for future STCG?

For example, I may have 100K STCL. If I will set it off against future 100K LTCG, I will save 10K but if I wait for another year and set off against 100K STCG, I will save 15K.

Do I get to choose or should I do that first come first basis?

Another question: is I will have 100K LTCG free next year. So I may choose to set off the LTCG in excess of 100K. Can I do that? What I meant is does the set off come first before tax free limit or you avail of tax free limit and then set off the CG?


(Dinesh Sairam) #9

Sorry for the late response, but no. You do not have the option of choosing when to offset your losses. Only if you are unable to offset losses in the current year, you will be allowed to carry them forward.

No, you cannot set off in excess of the Capital Gains. If you Capital Losses are greater than Capital Gains, it simply means that you have no Taxable Capital Gains (Since they are offset). The remaining portion, if any, of the Capital Losses can be carried forward and set off in the coming years.