@muralinn , Namaste ji.
As I understand from you short post, you a US person ( citizen/GreenCard/ Resident for Tax purposes ) have sold equities ( when acquired, when sold,) paid Indian tax ( finalized or just the usual 20% or more collected at source).
Now the question you are raising is if you are eligible to use Foreign Tax Credit to mitigate the double taxation of this foreign source income ( I am assuming here that these equities are bought / sold through your broker in India and/or these equities are placed/ listed ONLY in India.
While , I await your answer (s ) to the questions I have asked ( the parenthetical items above ), in general because India and US have a Tax Treaty in place , including the double Taxation clause, YES indeed you could use the Foreign Tax Credit/ Deduction to ameliorate the effects of double taxation.. Whether you should use the form 1116 really depends on your filing status and the quantum of the total foreign tax levied / paid on this foreign income..
Because you have both short-term and long-term gains ( per US tax laws ) you need to be careful to make sure that your total foreign source income and foreign taxes paid thereon be properly allocated. / accounted for.
I will circle back once I hear from you .
Namaste ji
pk
