LONG-TERM CAPITAL GAINS (LTCG)
Capital gains on sale of all listed securities in India mentioned below (other than debt oriented mutual funds or MFs) held for over 12 months are treated as LTCG. Unlisted shares and immovable property have to be held for over 24 months to qualify for LTCG. In all other types of capital assets, including debt-oriented MFs, sale after 36 months will qualify as LTCG.
SHORT-TERM CAPITAL GAINS (STCG)
When securities (other than a unit/equity oriented MF/zero coupon bonds) are held for up to a year, the gain is treated as STCG. For all other types of capital assets, holding up to 24/36 months will qualify as STCG.
SET-OFF PROVISIONS FOR CAPITAL LOSSES ARE RATHER RESTRICTIVE
- Loss from transfer of a long-term capital asset can be set off against gain from transfer of any other long-term capital asset in the same year. But, long-term capital loss cannot be set off against short-term capital gains.
- Loss from transfer of a short-term capital asset can be set off against gain from transfer of any other capital asset in the same year. Any unutilised capital loss after absorption in the same year can be further carried forward to next eight years and be utilised under the same conditions as above.
- File your I-T return on or before due date of filing the original return to carry forward any losses.
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