When an asset is sold after a year, it incurs a long-term capital loss. Short-term loss, on the other hand, occurs when the investment period is smaller than twelve months. To reduce your tax liabilities, you might claim a capital loss on your income tax return. However, not all capital losses are reportable, and claiming a tax deduction on a capital loss requires following a specified procedure.
If any Long Term Capital Loss arises on the sale of any asset, it is allowed to be set off against long-term capital gains arising from the sale of any asset. In other words, a long-term capital loss cannot be set off with short-term capital gain.
Note - These gains and losses are applicable till 31st march 2022