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FY23-24: Do You Have Losses from Trading? Here Are the Set-Off and Carry Forward Provisions

June 28, 2024

Could I offset my trading loss with the profits I earned on my long-term stocks and mutual funds holdings? What are the set-off rules for trading loss?

Let’s first understand how income from different transactions is classified. F&O trading is classified as a non-speculative business, while intraday trading is treated as a speculative business. Further, profits earned from stocks or mutual funds are considered as capital gains. Now, let’s talk about the rules for setting off trading losses.

Non-speculative losses, like those from F&O trades, can be offset against any other income head except salary income in the same financial year. This includes capital gains from stocks and mutual funds. So, you can set off your trading loss with the capital gains on stocks and mutual funds.

Remember, speculative or intraday losses can only be offset against other intraday profits.

In the table below, we mention the set-off and carry-forward rules for capital gains and business income.

Can you explain how to carry forward the losses from trading?

Your trading losses will first be adjusted against incomes in the current year, and the remaining losses (if any) are carried forward to subsequent years. Remember that F&O losses can be carried forward for up to 8 years, while those from intraday trading can only be carried forward for up to 4 years.

Carry-forward losses become brought-forward losses for the next year. These brought-forward losses from F&O can be offset against any kind of business income in the subsequent years, including both speculative and non-speculative business profits. On the other hand, intraday losses can be used to offset other intraday profits in future years.

For example, say you have short-term capital gains of ₹1L and face a loss of ₹3L from F&O. You can offset this loss against your capital gains, reducing your net taxable gains to zero. The remaining losses of ₹2L will be carried forward to the next year. As mentioned previously, once carried forward, F&O losses can only be set off against business income (both intraday and F&O). Hence, if you have F&O profits of ₹2L in the next year, your brought-forward losses will be adjusted, and your taxable profits will become zero.

I incurred trading losses last year but did not file my income tax return for that year. Can I use the carry-forward provision to claim the tax benefits?

A. In order to carry forward your losses, you need to file the ITR before the due date, which is 31st July of the respective assessment year. If you fail to do so, you cannot carry forward the losses.

PS: If you have any tax queries, comment below, and we will get them answered.

The above questions are answered by Surbhi Pal from Quicko. This is for informational purposes only. Consult your tax expert for individualized advice.

Content, Quicko


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33 comments
  1. Biswajeet Rana says:

    Thanks for the info Surbhi, my query is below:

    If my carry forward F&O losses are 15 lakhs and current year STCG from equity cash is 5 lakhs, can the STCG be set off against carry forward losses?

  2. Parveen says:

    I have a doubt, F&O losses can be set off against both LTCG and STCG but which head is setoff first 🤔.
    If i have 3 lakh F&o loss and 5 lakh LTGC with 2 lakh STCG then F&O loss setoff first against LTCG or STCG?
    I have to pay 1 lakh LTCG tax with 2 lakh STCG tax or either have to pay 3 lakh LTCG tax only?

  3. Vivek says:

    I have intraday f&o loss of few thousands and short term capital gain of few thousands in equity.

    Can I offset this profit with intraday f&o loss?

  4. prasad says:

    Current year loss in F&O can be set off against any income other than salary. My question is ” Any income other than salary” includes 1)interest on saving account
    2)Bank FD 3) zerodha liquidcase

  5. SPE says:

    Can I use Short-Term Capital Losses (STCL) from US stocks to offset Short-Term Capital Gains (STCG) from Indian stocks?

  6. ankita rajan says:

    I have net long term capital loss from sale of shares. Can i carry forward these losses next year even if I just file ITR1 this year? Or is there a form/ ITR2 that needs to capture details of the losses from this year?

  7. RAVI BHAT says:

    I have FNO losses in FY 23-24. I have sufficient LTCG to offset the business loss.

    I do not want to adjust my LTCG profits against the FNO loss as I pay 10% tax on LTCG whereas I pay 30% tax on my FNO gains in subsequent years. Do I have the choice to not offset my loss and carry it forward to next year.

  8. Karthikeya Shastry says:

    I am a salaried person who was filing ITR-1 all these days. What ITR form should be filled to show FnO Losses in the CY??

  9. Tushar says:

    Hi,

    I’ve F&O Loss this year and Short Term & Long Term Capital gain this year. My F&O Loss is getting setoff against Short Term and Long Term Capital Gain of the current year and then remaining loss is getting carried forward, all this is working fine. But, the problem is that my Capital Gain is also reducing my previous carried forward Capital losses (both Short Term & Long Term), so basically my previous carry forward losses are also reducing and current year setoff is also happening. So, I’m not getting right loss carry forward. If I remove setoff against current year capital gain loss then it gives an error on the validation page. Any recommendation on what could be the issue?

  10. Prasanta B says:

    can I set off brought forward losses in F&O with long term capital gain of house property selling

  11. V koti Reddy says:

    Can I set of my F&O loss to my long term capital gain by sale of house property for same financial year

  12. A Singla says:

    I have f&o business loss of 8 lac, LTCG of 5 lac and STCG of 6 lac. can i set off business loss first against STCG and then against LTCG or vice versa.

  13. Kalpesh says:

    Hello,

    I wasn’t aware of this AT ALL, I thought F&O gains and losses worked just like equities short term capital gain that is offset against short term capital loss equities only.
    So does this mean if someone has missed out showing F&O loss in ITR all these years still he can show in the next ITR as carry forward and offset with non salary income?

    Thanks a lot.

  14. Prajwal says:

    Is intraday profits/loss on F&O (MIS orders) considered as speculative or non – speculative?

    Could it be added under income from business profession as usual?

  15. Amit Agrawwl says:

    I had post loss on share of 1 lakh 22-23 and I have a profit share 83000 fy 23_24 both long term will I have to set of losses of last year or will it cap below 1 lakh non taxable and that 1 lakh get carry forward

  16. Rajat Bansal says:

    I had carried forward STCL of Rs.54517 in AY 2020-21 and LTCL of Rs. 159966. I have also had STCG in AY 2022-23 and AY 2023-24 but I forgot to offset those losses. I want to offset the STCL of AY 2020-21 this year i.e., AY 2024-25 and want to claim the LTCL of AY 2021-22 in some another year as my LTCG this year is below 1 lakh which is already tax free. Can I do it ?

  17. Kiran says:

    I have loss of 19k in F&O can I set off against FD interest

  18. Krishna Murari Sharma says:

    As per brochure deta my short term capital gain is 67000 but as per AIS it is 192000. For f.y.2023-24.which about should I enter in ITR return file. I am in great tension.
    Please clear it.

  19. Kinjal Mehta says:

    Hello

    I have carry forward loss for short term n long term capital gain of around 4 lakh
    And this year I lost fno around 6 lakh
    And short term n long term capital gain of 5 lakh
    Then is it mandatory to set off fno loss against current year of capital gain

    Or

    I can set off my this year capital gain with carry forwards loss under capital gain of previous year and pay remaining tax for capital gains and carry forward loss of fno

    Thanks in advance

  20. M Patel says:

    I am salaried employee and have not reported f and o losses for last 4 years
    Can I claim that all this year?

  21. Bharat says:

    I have a tuition income of 4 lakhs and f/o loss of 50k my current ITR will anyways be zero so I want can this 50k be careed to next year and this year I will fill itr of 4 lakhs (indirectly I don’t want to adjust this year but want to adjust this last next year is it possible)

  22. Jackson says:

    Lets say a person have incurred FNO loss of 4 lakh in FY2023 and carried forward. Then in FY2024 he has 0 income from FNO but gains from equity trading (short term) of 2 lakh. Can he set off this gain with FNO loss.
    If not as short term gain, can we show it as business gain and set off the amount?

  23. rohan patel says:

    hi,
    short term realised profit from equity – 10 lacs
    F&O loss – 12 lacs

    can this F&O loss be set off against short term equity profit?

  24. Yogesh Kumar says:

    I have F&O Loss of 80000 and short term gain of 800000. Can I fill return without audit? Turn over is 2 Crore

    I have 200000 loss in F&O few years back which is already motioned in previous ITR. Can I adjust that too in current year ITR against short term gain?

    Please advise

  25. Sai says:

    Hi, I need info about set off f&o lose

    Can I set of the f&o lose with VDA profit.

  26. Ravi K says:

    I have incurred F n O losses of few lakhs in fy 2017-18 2021-22. I reported it in ITR 3 for those years, after getting audit done.
    Now this fy 2023-24 I have not done any trading/investment etc, nor I have any profit/loss from any speculative/Non speculative/stock/mutiual fund transactions.
    So,do I have to file only ITR 3 for current year to ensure validity of those carry forward those losses ? Or can I fill ITR 1 this year and again ITR 3 next year, assuming trading profit occurs next year that may be set off against earlier losses of fy 2017-18.2021-22?

  27. Mahesh says:

    Can I carry forward intraday loss or F&O loss into next year under both new and old regime?

  28. Tyson says:

    Fno is non speculative even if it is done in intraday? Also does the order type matter?
    Like mis (intraday) or NRML(Carry forward) order effects the nature of the pnl as speculative vs non speculative for fno trades?
    Thanks!

  29. Sharad yadav says:

    What is the process ?

  30. BALAKRISHNAN MR says:

    I incurred a short term capital loss of ₹1.5 cr Last year. Though I provided the data to my CA, he outsourced to a TRP, who exactly copied from AIS & filed IT Return before July 31,2023 & this loss was not reported. I Received intimation for high value transaction, online After December 31,2023, even though intimation letter is dated December 26,2023. I Therefore could not file Revised return. So How can I claim & carry forward the above short term capital loss of ₹1.5 crore from investment in shares ?