Lost Money in Stocks? Carry Forward 8 Years of Losses

Even if you lost money in stocks or mutual funds this year, filing your ITR on time lets you carry those losses forward and reduce your tax bill when you eventually make profits — up to 8 years later.

Here's what happened: Short-term and long-term capital losses from stocks or mutual funds can be carried forward for up to 8 assessment years under Indian income tax rules.. To claim this carry-forward benefit, you MUST file your ITR before the due date — typically July 31 for individual taxpayers — even if your income is below the taxable limit.. Carried forward losses can be set off against future capital gains of the same type, directly reducing the tax you owe in profitable years ahead..

What you should do: File your ITR before July 31, 2025 even if you made no profit — missing the deadline permanently kills your right to carry forward capital losses.. Check your capital gains statement from your broker or mutual fund platform (Zerodha, Groww, CAMS, KFintech) and list all loss-making transactions under Schedule CG in your ITR.. Use ITR-2 (for salaried individuals with capital gains or losses) — not ITR-1 — to correctly report stock and mutual fund losses and activate the carry-forward benefit..

Long-term capital losses (on equity held over 1 year) can only offset long-term capital gains — not short-term ones. Short-term losses, however, can offset BOTH short-term and long-term gains, making them more flexible tax assets.