As per the provisions of section 70(2) of the Act, the short-term capital loss can be set off against gain from any other capital asset. Section 70(2) of the Act does not make any further classification between the transactions where STT was paid and the transactions where STT was not paid.

47. ITA 2134/Mum./2025

Schwab Emerging Markets Equity ETF

A.Y.: 2022-23 Date of Order : 11.6.2025 Section: 70

As per the provisions of section 70(2) of the Act, the short-term capital loss can be set off against gain from any other capital asset. Section 70(2) of the Act does not make any further classification between the transactions where STT was paid and the transactions where STT was not paid. Accordingly, the short-term capital loss arising from sale of shares subjected to Securities Transaction Tax ('STT) can first be set-off against the short-term capital gains arising from sale of securities not subjected to STT instead of short-term capital gains arising from sale of shares subjected to STT.

FACTS

For the year under consideration, the assessee, a company incorporated in Mauritius, registered with the Securities and Exchange Board of India as a Foreign Portfolio Investor, filed its return of income on 07/11/2022, declaring a total income of ₹270,76,67,910. In the course of assessment proceedings, it was observed that the assessee computed the net short-term capital gains by setting off the short term capital loss (on which STT was paid), which is taxable at 15% under s