TAX-LOSS HARVESTING

TAX-LOSS HARVESTING VALID TILL : 28TH MARCH 2025 ➖Selling a security/stocks that has incurred a loss to help investors reduce or offset taxes on any capital gains income subject to taxation. ➖The sold security can be bought back or replaced by a similar one ( Intraday square off not valid ) 📝 Please Note LTCG Loss: will be adjusted against long-term Gain only STCG LOSS: can be set off against both long-term Gain and short-term capital Gain (First priority short term Capital Gain) Example: 1) If an individual earns ₹1 lakh in Short-Term Capital Gains (STCG) this year, they must pay 20% of this amount as taxes, which amounts to ₹20,000. 2) Additionally, if the individual holds stocks with an unrealized loss of ₹60,000, they can sell these stocks to reduce their net STCG to ₹40,000. This would require paying 20% of ₹40,000, which amounts to ₹8,000 in taxes, resulting in a tax savings of ₹12,000. 3) This process of selling stocks to harvest losses and save on taxes is known as tax-loss harvesting.