Tax Harvesting Before March 31: Reduce Your Outflow Smartly

• Tax harvesting is a strategy to lower tax on capital gains from equities and equity mutual funds by strategically selling investments.
• March 31 is crucial as it's the financial year-end for booking capital gains and losses to calculate tax liability.
• Tax-gain harvesting involves selling long-term equity holdings within the tax-exempt limit (Rs 1.25 lakh) and reinvesting to reset the purchase price.
• Tax-loss harvesting uses realized capital losses to offset taxable capital gains, reducing overall tax outflow.
• Experts advise against reinvesting in the same securities immediately to avoid scrutiny and ensure genuine portfolio rebalancing.