Stock Losses? Offset ₹1.25L LTCG Tax This Way
If your stocks or mutual funds fell this year, you can use those losses to reduce tax on your profits. But there are strict rules on which loss can cancel which gain — knowing this can legally save you thousands.
Offsetting a ₹50,000 STCG with losses saves more than 6 months of chai money
Your LTCG above this is taxed — but losses can cut your bill
Key Takeaways
Review your equity and mutual fund portfolio now — identify any unrealised losses before March 31 to harvest them strategically before the financial year closes.
Check your capital gains statement from your broker or mutual fund platform and categorise each transaction as short-term or long-term before filing your ITR.
If you cannot use all losses this year, file ITR on time — unadjusted capital losses can be carried forward for up to 8 assessment years to offset future gains.
If your stocks or mutual funds fell this year, you can use those losses to reduce tax on your profits. But there are strict rules on which loss can cancel which gain — knowing this can legally save you thousands.
Here's what happened: Under Indian income tax rules, capital losses can be set off against capital gains — but only within specific categories defined by the IT Act.. Short-term capital losses (STCL) can be offset against BOTH short-term and long-term capital gains, giving wider flexibility to reduce your tax bill.. Long-term capital losses (LTCL) can ONLY be set off against long-term capital gains — they cannot reduce your short-term gains tax liability..
What you should do: Review your equity and mutual fund portfolio now — identify any unrealised losses before March 31 to harvest them strategically before the financial year closes.. Check your capital gains statement from your broker or mutual fund platform and categorise each transaction as short-term or long-term before filing your ITR.. If you cannot use all losses this year, file ITR on time — unadjusted capital losses can be carried forward for up to 8 assessment years to offset future gains..
Tax-loss harvesting works even in equity mutual funds — redeeming loss-making units and buying back after 30 days locks in the loss for set-off while keeping your investment intact.
Plan Your Tax Savings
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- [1]“Can you use stock market losses to reduce tax on other capital gains? Income tax rules explained” mint - money · 12 Jun 2026
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