I thought that Long term and Short team gains/losses belonged to different buckets from taxation perspective.
My auditor however tells that Equity Long term capital GAINS will ALWAYS offset short term capital LOSSES (but not vice versa)
please confirm… @Quicko
Your auditor is right.
STCG is taxed at higher rate than LTCG, so Govt tries it’s best to not let you carry forward your STCL to next year. And forces you to reduce / offset your STCL with LTCG which has lower tax rate.
However, LTCL cannot be offset or reduced by STCG because LTCG is itself raxed at lowest rate.
This is done to maximize Govt’s tax revenue.
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You can carry forward your losses only after you set it off first against other heads.
So it’s mandatory to set it off.