How To Gain From Capital Loss And Save Future Capital Gains Tax - YouTube

Here, we will discuss about capital loss basically, how you can gain from capital loss

Also, how does one deal with it when one is filing one's Income Tax

This presentation has been inspired by a question from our viewer P.B.Mohan

He asks if one needs to disclose it if one is not able to adjust in a financial year and where to show it

We strongly recommend that you disclose your capital losses since you are allowed to carry it forward for 8 consecutive financial years

Subsequent year capital gains can be offset against this capital loss

You can keep taking advantage till you exhaust this capital loss

This you will be able to preserve capital gains in the subsequent years

Remember, short term capital loss can be offset only against short term capital gains

Long term capital loss can be offset against long term capital gains as well as short term capital gains

Depending on your investment in asset class, short term capital gains and long term capital gains get defined and taxed

So, if you have invested in equities or equity-related investment such as equity mutual fund

For capital gains made on investments of less than 1 year you pay short term capital gains tax of 15% on your short term capital gains

For capital gains made on investments of more than 1 year, you pay long term capital gains tax of 10% on long term capital gains of more than Rs 1 lakh

For every other category be it investments in debt, real estate or gold, capital gains tax regulations are the same

For investments of less than three years, the capital gains are treated as short term capital gains and get added to your income

It gets taxed according to your income tax slab

For gains made on investments of more than three year, the gains get adjusted for inflation through inflation indexation

The long term capital gains comes down for taxable purposes due to this

The second advantage is you get taxed at 20% for long term capital gains tax

You need to disclose your capital loss or capital losses under your income from capital gains while filing for income tax

This is one of the five heads of income for income tax purposes