Estimate the tax you save by booking unrealised equity losses against this year's realised gains before financial year end. Indian capital-gains rules let STCG losses cross into LTCG; LTCG losses do not flow the other way. That asymmetry decides which losses to harvest first.
Post-July-2024 Budget rates: STCG on listed equity is 20% (was 15%); LTCG on listed equity is 12.5% on gains above the ₹1.25 lakh exemption (was 10% above ₹1 lakh). All numbers on this page use the new rates.
Order of set-off (Income Tax Act, sections 70/71): an STCG loss first offsets STCG of the same year, then any leftover crosses into LTCG of the same year. An LTCG loss can only offset LTCG — it cannot cross into STCG. That asymmetry means STCG losses are strictly more valuable per rupee than LTCG losses; harvest the short-term ones first.
Anything not set off this year carries forward for up to 8 assessment years, preserving the bucket: STCG-loss carry-forward stays usable against STCG/LTCG; LTCG-loss carry-forward stays LTCG-only. Full methodology · reviewed January 2026.
Watch out for the wash-sale equivalent: SEBI does not impose one in India, but selling and immediately re-buying the same scheme within the same trade settlement window can collapse the loss under the "real intent" doctrine in scrutiny — leave a gap of at least one settlement cycle and ideally rebalance to a correlated-but-different instrument.
Tax estimates only; consult a chartered accountant for filing. MintByte is an AMFI-registered mutual fund distributor (ARN-314872); SEBI Registered Investment Adviser and Research Analyst registrations are in process. Not tax or investment advice.