New Delhi, Feb. 12 -- Selling a stock, bond, mutual fund, or real estate at a loss may feel like a setback, but it can actually work in your favor at tax time. The Income Tax Act allows taxpayers to use capital losses to offset gains, reducing their tax burden.

Even if you can't use the entire loss in a single year, you may carry it forward for future tax benefits. Here's how you can turn losses into tax savings.

Capital losses can be used strategically to reduce tax liability, but they must be set off according to specific rules.

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"Long-term capital losses (LTCL) can only be adjusted against long-term capital gains (LTCG), while short-te...