Equity Trading:

Short Term Capital Losses:

• Treatment in Same Year: Short Term Capital Losses(STCL) can be set off against other STCG and LTCG. It can not be set off against other incomes.
• Treatment in Next Year: Short Term Capital Losses(STCL) can be carried forward for 8 years and set off against Capital Gains only.

Long Term Capital Losses:

• Treatment in Same Year: Long Term Capital Losses(LTCL) can be set off against other LTCG. It can not be set off against STCG and any other income.

• Treatment in Next Year: Long Term Capital Losses(LTCL) can be carried forward for 8 years and set off against Capital Gains only.

Futures and Options

Under F&O Trading, the loss can be claimed and carried forward if a tax audit has been conducted by a professional chartered accountant in practice. This loss can be carried forward to future years and set off against future profits to reduce the income tax liability.

Loss from F&O Trading is a Non-Speculative Business loss. In the current year, it can be set off against any income except salary income. In future years, it can be set off against business income (both speculative and non-speculative). The loss can be carried forward for 8 years.

Intraday Trading

Under Equity Intraday Trading, the loss can be claimed and carried forward if a tax audit has been conducted by a professional chartered accountant in practice. This loss can be carried forward to future years and set off against future profits to reduce the income tax liability.

Loss from Equity Intraday Trading is a Speculative Business Loss. It can be set off only against Speculative Business Profits. The loss can be carried forward for 4 years.