{"id":9360,"date":"2025-03-19T06:03:23","date_gmt":"2025-03-19T06:03:23","guid":{"rendered":"https:\/\/navia.co.in\/blog\/?p=9360"},"modified":"2025-08-19T05:39:59","modified_gmt":"2025-08-19T05:39:59","slug":"short-term-capital-losses-long-term-capital-gains","status":"publish","type":"post","link":"https:\/\/navia.co.in\/blog\/short-term-capital-losses-long-term-capital-gains\/","title":{"rendered":"Using Short-Term Capital Losses to Reduce Long-Term Capital Gains Tax"},"content":{"rendered":"\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><nav><ul><li class=\"\"><a href=\"#key-points\">Key Points:<\/a><\/li><li class=\"\"><a href=\"#illustrative-example\">Illustrative Example<\/a><\/li><li class=\"\"><a href=\"#benefits-of-this-strategy\">Benefits of This Strategy:<\/a><\/li><li class=\"\"><a href=\"#carry-forward-of-unadjusted-losses\">Carry Forward of Unadjusted Losses:<\/a><\/li><li class=\"\"><a href=\"#important-considerations\">Important Considerations:<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n<p>Yes, you can use short-term capital losses (STCL) to offset long-term capital gains (LTCG) and reduce your tax liability. In India, the Income <a href=\"https:\/\/navia.co.in\/blog\/budget-2025-big-tax-savings-see-how-much-you-save\/\">Tax<\/a> Act allows for such adjustments, enabling taxpayers to manage their capital gains tax more efficiently.<\/p>\n\n\n\n<iframe class=\"custom-video\" src=\"https:\/\/www.youtube.com\/embed\/d84aOVV90k4?si=FVTyxfR4kgxORTXw\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-ed718d7a16ee27da9ef608087a4412a5\" id=\"key-points\" style=\"color:#023368\"><strong>Key Points:<\/strong><\/h2>\n\n\n\n<p><strong>1. Short-Term Capital Loss (STCL):<\/strong> Occurs when a capital asset held for less than 12 months is sold at a loss.<\/p>\n\n\n\n<p><strong>2. Long-Term Capital Gain (LTCG):<\/strong> Arises when a capital asset held for more than 12 months is sold at a profit.<\/p>\n\n\n\n<p><strong>3. Set-Off Provisions:<\/strong><\/p>\n\n\n\n<p><strong><strong>\u25cf<\/strong><\/strong> <strong>STCL<\/strong> can be set off against both STCG and LTCG.<\/p>\n\n\n\n<p><strong><strong><strong>\u25cf<\/strong><\/strong><\/strong> <strong>Long-Term Capital Loss (LTCL)<\/strong> can only be set off against LTCG.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-dbe09c953c7a4bc81fb182bb85783826\" id=\"illustrative-example\" style=\"color:#023368\"><strong>Illustrative Example<\/strong><\/h2>\n\n\n\n<p>Let&#8217;s consider a scenario where an investor has both long-term capital gains and short-term capital losses in a financial year.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><td><strong><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec4d37\" class=\"has-inline-color\">Particulars<\/mark><\/strong><\/td><td><strong><mark style=\"background-color:rgba(0, 0, 0, 0);color:#ec4d37\" class=\"has-inline-color\">Amount (\u20b9)<\/mark><\/strong><\/td><\/tr><\/thead><tbody><tr><td><strong>Long-Term Capital Gains (LTCG)<\/strong><\/td><td>2,00,000<\/td><\/tr><tr><td><strong>Exemption on LTCG<\/strong><\/td><td>1,25,000<\/td><\/tr><tr><td><strong>Taxable LTCG<\/strong><\/td><td>75,000<\/td><\/tr><tr><td><strong>Short-Term Capital Loss (STCL)<\/strong><\/td><td>50,000<\/td><\/tr><tr><td><strong>Net Taxable LTCG after STCL Set-Off<\/strong><\/td><td>25,000<\/td><\/tr><tr><td><strong>Tax Rate on LTCG (12.5%)<\/strong><\/td><td>3,125<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-87cba99cd4711ca2b12127bdc8599a18\" id=\"benefits-of-this-strategy\" style=\"color:#023368\"><strong>Benefits of This Strategy:<\/strong><\/h2>\n\n\n\n<p>By setting off the short-term capital loss against the taxable long-term capital gains, the investor reduces the taxable amount from \u20b975,000 to \u20b925,000, thereby lowering the tax payable from \u20b99,375 to \u20b93,125.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/navia.co.in\/app.html\" style=\"background-color:#ec4d37\"><strong>Get Navia APP<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-7d6510890ee53eb5ad749a5d9e7024ce\" id=\"carry-forward-of-unadjusted-losses\" style=\"color:#023368\"><strong>Carry Forward of Unadjusted Losses:<\/strong><\/h2>\n\n\n\n<p>If the short-term capital loss exceeds the taxable long-term capital gains, the unadjusted loss can be carried forward to subsequent years (up to 8 assessment years) to offset future capital gains.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/open.navia.co.in\/\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"149\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-1024x149.png\" alt=\"open free demat account with Navia\" class=\"wp-image-7790\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-1024x149.png 1024w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-300x44.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-150x22.png 150w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-768x112.png 768w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15.png 1028w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-e1ae92fdad162d9ae7360e92e124e941\" id=\"important-considerations\" style=\"color:#023368\"><strong>Important Considerations:<\/strong><\/h2>\n\n\n\n<p>\ud83d\udd38 Ensure that the income tax return is filed before the due date to avail the benefit of carrying forward losses.<\/p>\n\n\n\n<p>\ud83d\udd38 Maintain accurate records of all transactions to substantiate claims during tax assessments.<\/p>\n\n\n\n<p>By effectively utilizing short-term capital losses to offset long-term capital gains, taxpayers can optimize their tax liabilities and enhance post-tax returns on their <a href=\"https:\/\/navia.co.in\/blog\/category\/investments\/\">investments.<\/a><\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>Do You Find This Interesting?<\/strong><\/p>\n\n\n\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-ad2f72ca wp-block-group-is-layout-flex\">\n<p>We\u2019d Love to Hear from you-<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/form.typeform.com\/to\/bpQ8ZlDc\"><img decoding=\"async\" width=\"300\" height=\"64\" 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The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yes, you can use short-term capital losses (STCL) to offset long-term capital gains (LTCG) and reduce your tax liability. In India, the Income Tax Act allows for such adjustments, enabling taxpayers to manage their capital gains tax more efficiently. Key Points: 1. Short-Term Capital Loss (STCL): Occurs when a capital asset held for less than [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9383,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[485,11,21,489,53,486,488,461,487,32],"class_list":["post-9360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","tag-capital-gains-tax","tag-financial-goals","tag-investments","tag-ltcg","tag-marketperformance","tag-short-term-capital-losses","tag-stcl","tag-tax","tag-using-short-term-capital-losses-to-reduce-long-term-capital-gains-tax","tag-wealth-creation"],"featured_image_src":"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/Smart-Tax-Planning-Using-Short-Term-Capital-Losses-to-Reduce-Long-Term-Capital-Gains-Tax-1.png","author_info":{"display_name":"Navia Markets","author_link":"https:\/\/navia.co.in\/blog\/author\/tradeplusonline\/"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/9360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/comments?post=9360"}],"version-history":[{"count":20,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/9360\/revisions"}],"predecessor-version":[{"id":12588,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/9360\/revisions\/12588"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media\/9383"}],"wp:attachment":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media?parent=9360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/categories?post=9360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/tags?post=9360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}