Tax Harvesting: Save Capital Gains Before March 31 Deadline

• Tax harvesting reduces tax liability by strategically booking gains or losses on investments before the financial year ends.
• Long-term capital gains (LTCG) up to Rs 1.25 lakh from listed shares and equity mutual funds are tax-free if STT is paid; gains above this are taxed at 12.5%.
• Short-term capital losses can offset both long-term and short-term capital gains, while long-term capital losses can offset long-term capital gains.
• To qualify for tax harvesting, shares must be sold and delivered from your demat account; repurchase can be done the next day or same day with multiple accounts.
• Tax harvesting for the Rs 1.25 lakh LTCG limit must be done by March 31; unabsorbed capital losses can be carried forward.

Key Questions Answered

How can investors use tax harvesting to save capital gains tax before March 31?

Investors can use tax harvesting to save capital gains tax before March 31 by strategically selling investments to book gains within the tax-exempt limit or realize losses to offset taxable gains {{1}

What is the tax-free limit for Long-Term Capital Gains (LTCG) from listed shares?

Currently, the tax-free limit for Long-Term Capital Gains (LTCG) from listed shares is ₹1.25 lakh annually. Gains exceeding this amount are taxed at 12.5%.

Can you repurchase the same shares immediately after selling them for tax harvesting?

Yes, investors can repurchase the same shares immediately after selling them for tax harvesting. This strategy resets the purchase price, allowing for future tax savings.