Stock market losses can ease your tax burden if you don’t ignore this crucial caveat
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- Ritika Nayyar explains that both short‑term and long‑term capital losses can be carried forward for up to eight assessment years, but long‑term losses offset only long‑term gains.
- Siddharth Maurya warns that the loss carry‑forward benefit lapses if the income tax return isn’t filed by the statutory deadline, even for taxpayers below the taxable bracket.
- Singhania & Co notes that short‑term losses can be set off against any capital gain, while unlisted shares held over 24 months are treated as long‑term for tax purposes.
Why it matters: Investors with S&P 500 and Nasdaq gains can reduce taxable income by up to eight years of carried‑forward losses, but must file ITR by the deadline or lose the credit, effectively preserving cash flow for future investments.
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