I have short term losses from equity transactions carried forward from previous years. In the current year I have short term gains from mutual funds like Templeton India Ultra Short Bond Fund Retail Plan- Growth, ICICI Prudential Interval Fund II Quarterly Interval Plan A- Retain Cumulative. Can I set off the above current year short term gains against the the carried forward short term loss from share transactions.
- P Padmanabhan
Short-term capital loss can be set off from any capital gains, short-term or long-term. Long-term capital loss can be set off only against long-term capital gains. Also, if a certain year's capital loss cannot be set off against the capital gain of a succeeding year, it can be carried forward for the next eight years.
So, you can set off your short-term capital loss from equity against the short-term capital gain of both your equity and debt investments as well as long-term capital gains of only debt (as long term capital gain on equity is exempt from tax). The treatment of short-term capital loss is different from that of speculative loss. If you incurred speculative loses during intraday trade, they can only be set off through speculative income and can be carried forward up to four years. Intraday trading comes in play when you sell shares without taking actual delivery and also don't pay any STT on those transactions.
This article was originally published on March 14, 2013.
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