Capital gains loss set-off rules: long-term and short-term loss matching and carryforward require timely return filing. Brought forward long term capital loss can be set off only against current year long term capital gains and not against short term capital gains; brought forward short term capital loss can be set off against current year short term gains and may also be applied against current year long term gains. Capital losses are eligible for carryforward for a limited period after the year of computation, provided a return declaring the loss is furnished before the prescribed due date.