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Can I offset long-term capital gains (LTCG) from selling equity mutual fund units with the losses I made from selling stocks within a year? - Jothis TV
Yes, you can offset your short-term capital losses (STCL) from equities against long-term capital gains (LTCG) from equity mutual funds.
Here's a quick overview of the rules specifically for equities:
Offsetting your equity gains: What you can and cannot do
| Type of loss | Can be offset against | Carry forward option |
|---|---|---|
| Short-term capital loss (STCL) | Both short-term and long-term capital gains | Can be carried forward for eight years if declared in your tax return on time. |
| Long-term capital loss (LTCL) | Only long-term capital gains | Can also be carried forward for eight years if declared in your tax return. |
What are short-term and long-term gains or losses?
-
Short-term capital gains or losses (STCG/STCL):
In the case of equities, if the investment is sold within 12 months, it qualifies as a short-term capital asset. The gains from the same are taxed at 20 per cent.
- Long-term capital gains or losses (LTCG/LTCL): In the case of equities, if the investment is sold after 12 months, it qualifies as a long-term capital asset. The gains from the same are taxed at 12.5 per cent. However, gains up to Rs 1.25 lakh are exempt.
Pro tip: Always file your income tax return before the deadline (July 31 in most cases) to carry forward unused losses for up to eight years.
In this case, unused losses are the losses from selling shares that you couldn't set off against your income during the current financial year.
Also read: Are you taxed twice when switching from 'regular' to 'direct' mutual funds?
This article was originally published on January 23, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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