{"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":"2026-08-08T05:00:33","modified_gmt":"2026-08-08T05:00:33","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":"<ul><li><a class=\"aioseo-toc-item\" href=\"#aioseo-key-points\">Key Points<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-illustrative-example\">Illustrative Example<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-benefits-of-this-strategy\">Benefits of This Strategy<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-carry-forward-of-unadjusted-losses\">Carry Forward of Unadjusted Losses<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-important-considerations\">Important Considerations<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-key-takeaways\">Key Takeaways<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#aioseo-frequently-asked-questions\">Frequently Asked Questions<\/a><\/li><\/ul>\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"jetpack-video-wrapper\"><iframe title=\"How to Save Tax Using Short-Term Capital Losses | Capital Gains Tax Hack\" src=\"https:\/\/www.youtube.com\/embed\/d84aOVV90k4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\" style=\"border-left:4px solid #e8622f;background:#fdf1ec;padding:18px 22px;margin:1.5em 0;line-height:1.8;\"><strong>\ud83d\udca1 Quick Answer<\/strong><br>Yes, short-term capital losses (STCL) can be set off against long-term capital gains (LTCG) under the Income Tax Act, reducing your tax liability. STCL can offset both STCG and LTCG, while long-term capital losses can only offset LTCG. Unadjusted losses carry forward up to 8 assessment years.<\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-83780662462b6e44e7dd9eccfff64935\" style=\"color:#023368\" id=\"aioseo-key-points\"><strong>Key Points:<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\"><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 class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\"><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 class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\"><strong>3. Set-Off Provisions:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\" style=\"margin:1em 0;line-height:1.9;\">\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\"><strong>STCL<\/strong> can be set off against both STCG and LTCG.<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\"><strong>Long-Term Capital Loss (LTCL)<\/strong> can only be set off against LTCG.<\/li>\n\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-1abeaeb2b49c8a8f859d50db8a0f344a\" style=\"color:#023368\" id=\"aioseo-illustrative-example\"><strong>Illustrative Example<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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-4705888ee1632a4c2feb73bd2e44c711\" style=\"color:#023368\" id=\"aioseo-benefits-of-this-strategy\"><strong>Benefits of This Strategy:<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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-fe48e5de 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?utm_source=Organic&#038;utm_medium=blog&#038;utm_campaign=blog&#038;utm_content=capital_loss_setoff_CTA\" 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-2b032bf28a20333705e1570173413c94\" style=\"color:#023368\" id=\"aioseo-carry-forward-of-unadjusted-losses\"><strong>Carry Forward of Unadjusted Losses:<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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\/?utm_source=Organic&#038;utm_medium=blog&#038;utm_campaign=blog&#038;utm_content=capital_loss_setoff_CTA\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"149\" style=\"max-width:100%;height:auto;\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2024\/12\/image-15-1024x149.png\" alt=\"setting off short term capital losses against long term capital gains tax\" 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-d327225a972f1a536e7ff6aa4744b64b\" style=\"color:#023368\" id=\"aioseo-important-considerations\"><strong>Important Considerations:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\" style=\"margin:1em 0;line-height:1.9;\">\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">Ensure that the income tax return is filed before the due date to avail the benefit of carrying forward losses.<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">Maintain accurate records of all transactions to substantiate claims during tax assessments.<\/li>\n\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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<h2 class=\"wp-block-heading\" style=\"color:#023368\" id=\"aioseo-key-takeaways\"><strong>Key Takeaways<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\" style=\"margin:1em 0;line-height:1.9;\">\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">Short-Term Capital Loss (STCL) occurs when a capital asset held for less than 12 months is sold at a loss.<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">Long-Term Capital Gain (LTCG) arises when a capital asset held for more than 12 months is sold at a profit.<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">STCL can be set off against both STCG and LTCG; Long-Term Capital Loss (LTCL) can only be set off against LTCG.<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">Unadjusted losses can be carried forward to subsequent years (up to 8 assessment years).<\/li>\n\n\n<li style=\"margin-bottom:0.8em;line-height:1.8;\">File the income tax return before the due date to avail the benefit of carrying forward losses.<\/li>\n\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"color:#023368\" id=\"aioseo-frequently-asked-questions\"><strong>Frequently Asked Questions<\/strong><\/h2>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px;\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px;\">Can short-term capital losses be set off against long-term capital gains?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0;\">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.<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px;\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px;\">Can long-term capital losses be set off against short-term capital gains?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0;\">No. Long-Term Capital Loss (LTCL) can only be set off against LTCG. Short-Term Capital Loss (STCL) is the more flexible of the two, because it can be set off against both STCG and LTCG.<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px;\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px;\">How long can unadjusted capital losses be carried forward?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0;\">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<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px;\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px;\">What is required to carry forward a capital loss?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0;\">Ensure that the income tax return is filed before the due date to avail the benefit of carrying forward losses, and maintain accurate records of all transactions to substantiate claims during tax assessments.<\/p>\n\n<\/details>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><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-8f761849 wp-block-group-is-layout-flex\">\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify;\">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\" style=\"max-width:100%;height:auto;\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png\" alt=\"feedback yes or no button\" class=\"wp-image-8901\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1-150x32.png 150w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/figure>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:13px;line-height:1.6;color:#777;\"><strong>DISCLAIMER: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit.<\/strong><br>Full disclaimer: https:\/\/bit.ly\/naviadisclaimer<\/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. \ud83d\udca1 Quick AnswerYes, short-term capital losses (STCL) can be set off against long-term capital gains (LTCG) [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9383,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ub_ctt_via":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[5],"tags":[485,489,486,488,461],"class_list":["post-9360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","tag-capital-gains-tax","tag-ltcg","tag-short-term-capital-losses","tag-stcl","tag-tax"],"aioseo_notices":[],"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\/"},"jetpack_featured_media_url":"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","jetpack_sharing_enabled":true,"_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":21,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/9360\/revisions"}],"predecessor-version":[{"id":19023,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/9360\/revisions\/19023"}],"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}]}}