Today’s Ask Wallet Wise explains how one can set off short-term capital losses against the short-term capital gains on which tax has already been deducted.
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I have earned some short-term capital gain from listed shares till February for the financial year 2025-26. My broker has deducted tax on it. In March, I incurred short-term losses on other share transactions. There is some book loss for the shares bought and still lying with me. Please advise how I can take advantage of the tax that has already been deducted. Can I adjust the notional loss also against the profit earned?
Expert’s Advice: Since tax has been deducted on short-term capital gains by your broker, I presume you are a non-resident for income tax purposes, and the broker has deducted the tax under section 195 of the Income Tax Act.
However, in case you are not a non-resident and tax seems to have been deducted, seek clarification from your broker, as the broker is not supposed to deduct any tax at source on any capital gains of residents. Please check whether he has deducted something else? You can verify the tax deducted from the Annual Information Statement (AIS), which you can download from your login on the income tax website.
Please note that you cannot claim any tax benefits in respect of the notional loss, i.e. on the shares which you have not sold and which have just depreciated in value. The loss arises when the shares are sold or transferred.
In regards to the loss already booked during March on the shares sold by you, you can file your income tax return and set off such short-term capital losses against the short-term capital gains on which tax has already been deducted. You can claim a refund for the tax deducted by the broker.
Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to consult certified experts before making any investment decisions.
