File your return on time to carry forward your capital losses

A of taxpayers who have incurred a loss on equity shares are not sure who they should go about disclosing this in their return.

Current year losses

Both short term capital loss and long term capital loss must be reported in your tax return.

If you have sold equity shares and have incurred a short term loss, although you have no tax liability it’s important you report this loss in your return. While calculating your final tax liability this loss can be adjusted against other capital losses. Since this capital loss can be set off against capital gains, it reduces your total taxable income. Do note that short term capital loss can be set off against long term or short term gain, however long term losses can only be set off against long term gains. Also, any long term loss on equity shares or equity funds is a dead loss and cannot be set off or carrie forward.

Any loss which is left after adjusting can be carried be carried forward and adjusted against capital gains in future years.

On ClearTax, you don’t need to worry about adding them for carry forward – any unadjusted losses if they are eligible to be carried forward they are picked up in the ‘loss summary’ tab automatically within ClearTax.

Previous year losses

If you have unadjusted losses from previous years, do remember to add them while filing your return in the current year. To understand how to add previous year losses in your tax return – click here. Do note that for the IT Department there is no way to know carry forward of your losses unless you have added them into your return each year.


If you need any help – write to us and we will assist you file. You can buy our capital gains plan here and our CAs will prepare and e-file your tax return.


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2 Responses to File your return on time to carry forward your capital losses

  1. Sriraman August 31, 2015 at 2:13 pm #

    This year I have filed my IT return using your platform and I have long term capital loss. Will it be updated automatically in my next year return in your platform or I need to enter it manually?