1. CBDT allows Indexation benefits to calculate LTCG from investments in debt funds, hence net LTCG of your debt funds should be arrived after availing it.
2. CBDT also allows exemption of 1 lakh on LTCG from equity investments, hence net LTCL of your equity funds should be arrived after availing it.
3. Thereafter, net LTCG of debt funds can be used to set off net LTCL of equity funds.
4. In fact, while LTCL can be set off against LTCG only, STCL (if any) can be set off against STCG and LTCG both.
5. Even after this, you can carry forward any unadjusted losses up to next 8 assessment years of incurring the loss for adjustments against income of those years, provided returns are filed within original due dates.
6. Before 31.03.2018, as there was no LTCG tax on equities, LTCL on equities was considered as a dead loss and was not allowed to be set off or carried forward.
2. CBDT also allows exemption of 1 lakh on LTCG from equity investments, hence net LTCL of your equity funds should be arrived after availing it.
3. Thereafter, net LTCG of debt funds can be used to set off net LTCL of equity funds.
4. In fact, while LTCL can be set off against LTCG only, STCL (if any) can be set off against STCG and LTCG both.
5. Even after this, you can carry forward any unadjusted losses up to next 8 assessment years of incurring the loss for adjustments against income of those years, provided returns are filed within original due dates.
6. Before 31.03.2018, as there was no LTCG tax on equities, LTCL on equities was considered as a dead loss and was not allowed to be set off or carried forward.