Written by Harwansh Tiwari — Bengaluru-based personal finance builder and founder of NiyamFin. Educational only; not financial advice.
Published · Last reviewed: · Data checked: · Reviewed event-driven or after major regulatory changes · Updated after Budget 2025-26 / FY 2026-27
Sources: Income Tax Department, RBI, SEBI, PFRDA, IRDAI, AMFI · See methodology
Capital-Loss Set-Off and Equity LTCG Thresholds in India
Understand capital-loss set-off, carry-forward and the aggregate equity LTCG threshold without treating tax rules as trading instructions.
Quick answer
EstimateCapital-loss set-off and the aggregate Section 112A threshold affect a complete tax computation. They are not instructions to sell, repurchase or manufacture a loss.
Capital-gains rules can allow eligible losses to be set off against eligible gains, while Section 112A uses an aggregate annual threshold for qualifying long-term equity gains. These rules affect a complete tax computation; they are not instructions to sell, repurchase or manufacture a loss.
This page was reviewed on 8 October 2026. Transaction dates, asset classification, filing status and other gains or losses can change the result.
Loss classification matters
- A short-term capital loss may generally be set off against eligible short-term or long-term capital gains.
- A long-term capital loss may generally be set off only against eligible long-term capital gains.
- Carry-forward depends on the applicable filing conditions and time limit.
A calculator that sees one sale cannot establish the treatment of the complete return.
The Section 112A threshold
For qualifying long-term gains on specified listed equity, equity-oriented funds and business-trust units, the current rate framework for transfers on or after 23 July 2024 applies 12.5% above the aggregate ₹1.25 lakh threshold for the financial year.
The threshold is not per fund, share or transaction. It also does not make every equity receipt “tax-free”; the asset, holding period, STT and other statutory conditions still matter.
Arithmetic example
Suppose qualifying Section 112A gains total ₹2,00,000 for the financial year and no other amount has used the threshold. The amount above ₹1.25 lakh is ₹75,000, and 12.5% of that amount is ₹9,375 before cess and other applicable adjustments.
This example explains the tax arithmetic only. It is not a recommendation to realise gains, reset a cost basis or time a trade.
What this page does not assume
- that an immediate repurchase has no market, settlement, transaction-cost or anti-avoidance consequence;
- that every loss shown by a broker is eligible for the intended set-off;
- that reducing modeled tax improves the investment decision; or
- that current rates will remain unchanged in a later financial year.
Keep contract notes and acquisition records, reconcile the complete set of gains and losses, and verify the current filing rules before claiming a set-off or carry-forward.
Official sources
Tax consequences should be assessed after the investment decision and transaction facts are understood, not used as a standalone direction to trade.
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Comparing tax choices? Estimate the impact with your own numbers.
Data sources checked
Source-dependentData last checked: 2026-10-08
Rules, rates, and regulatory details can change. Use the source links below to verify current facts before acting.
Disclaimer
This article is for general education only. It does not provide financial, investment, tax, insurance, lending, or legal advice and should not be used as the basis for financial decisions.