If there is a loss under the head Capital Gains and it cannot be set off or only partially set off under the same head or other head of income under section 71 then such loss can be carried forward to subsequent years. The loss so carried forward can be set off from income under the head “Capital Gains”(not from income under other heads).
Long term capital loss can be set off only against long term capital gain.
Loss can be carried forward for a period of eight years from the year in which the loss is occurred.
Loss can be carried forward only when a return is filed by assessee under section 139 within due date. If return is submitted after due date the delay may be condoned if a few conditions are satisfied.[ circular no. 8/2001 dated may 16 2001]