Equity Delivery trading is considered to be Capital Gains.
Income from trading in futures and options i.e. F&O is a Non-Speculative Business Income while Income from equity intraday trading is a Speculative Business Income. As per the income tax rules to set-off loss, Capital Loss can be set-off against Capital Gains only and no other income.
Loss from equity delivery trading can be set-off in the following manner:
- Short Term Capital Loss (STCL) can be set off against both STCG and LTCG.
- Long Term Capital Loss (LTCL) can be set off against LTCG only.
The remaining Capital Loss can be carried forward for 8 years. It can be set off against future Capital Gains only in the same manner as above.