# Capital & Trading Loss Set-Off and Carry Forward

> Short-term capital losses can be set off against any capital gains; long-term capital losses only against long-term gains; both carry forward for eight years. F&O (non-speculative business) losses can be set off against any income except salary in the same year, then carried forward for eight years against business income. Speculative losses offset only speculative income and carry forward for four years. Losses can be carried forward only if the return is filed by the due date.

Practice: Trader & Investor Tax — https://www.industax.com/services/investor-tax/

The single most expensive mistake traders make is filing late: a belated return still lets you file, but loses the carry-forward of business and capital losses for that year (house property loss and unabsorbed depreciation are exceptions).

We track losses year by year in Schedule CFL so every rupee is used in the right order, and plan harvesting of gains against carried-forward losses before they expire.

## Key facts

| Item | Detail |
| --- | --- |
| STCL | Against STCG or LTCG; 8 years |
| LTCL | Against LTCG only; 8 years |
| F&O loss | Against any head except salary; 8 years against business income |
| Speculative loss | Against speculative income; 4 years |
| Condition | Return filed by the due date |

## Who needs this

- Investors with capital losses
- Traders with F&O or intraday losses
- Anyone who filed late and lost carry-forwards

## What's included

- Loss mapping across years
- Schedule CFL
- Harvesting plan
- Filing on time

## Documents

- Previous ITRs and computations
- Broker P&L statements

## Process

1. **Map** — Losses by year and type tabulated.
2. **Use** — Set off in the right order.
3. **Carry** — Balance carried forward in time.

## FAQs

### Can I carry forward losses if I file a belated return?

Not business or capital losses for that year. They can be carried forward only if the original return is filed by the due date under Section 139(1).

### Can crypto losses be carried forward?

No. Losses from virtual digital assets can't be set off against any income or carried forward.

### Can long-term losses on shares offset short-term gains?

No. Long-term capital losses can be set off only against long-term capital gains.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/investor-tax/trading-loss-set-off
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.