AMA: Tax Loss Harvesting

So the markets are shooting up. Chances are your portfolio is positive and gaining!! :grin:

But did you know, if you have losses, you can “harvest” them?
With Tax Loss Harvesting, you realise your losses and set them off against your realised gains, thereby adjusting the tax liability.

Also, a bonus chance to rebalance your portfolio. :handshake:

Got questions around Tax Loss Harvesting?
Shoot’em, and we will take care of the rest!

To understand more about Tax Loss Harvesting, you can check out our blog. :point_down:

Understand more about setting off and carry forwarding losses here :point_down:

Hey @TeamQuicko

Can I set off long-term capital losses against short-term capital gains??

Thanks in advance!

Hey Shweta, I believe long-term capital losses cannot be set off against short-term capital gains.

I want to opt for Tax Loss Harvesting to save tax but I still want to hold the stock. What should I do?

I have a Salary Income and I have an unrealized loss from Equity Trading Income. Will Tax Loss Harvesting help me save more on taxes?

Hey @Shweta_Saini

No, You can only set off long-term capital losses against long-term gains. However, you can set off short-term capital losses against both long-term and short-term capital gains.

Hey @riya_gupta

You can opt for Tax Loss Harvesting by selling the existing holdings on which there is an Unrealised Loss. Thus, the loss can be adjusted with realised profit to reduce the tax liability.

However, if you want to continue holding the stock to keep the portfolio unchanged, you can buy the shares again on the next trading day. However, you must ensure that the transaction cost of entering into buy and sell transaction is less than the amount of taxes saved from Tax Loss Harvesting.

Hope this helps!

Hey @TanyaChopra

The loss from equity trading cannot be adjusted with Salary Income. Thus, we would suggest not opting for Tax Loss Harvesting since it would not reduce your tax liability.

I have a Realised Short Term Profit of Rs. 3,00,000. However, there is an Unrealised Long Term Loss of Rs. 1,00,000. Should I opt for Tax Loss Harvesting by selling the shares to realize the loss?

Thanks in advance. :v:

Hi @sushil_verma,

If you opt for Tax Loss Harvesting by selling the shares held for more than a year, it would be a Realised Long Term Capital Loss (LTCL). Additionally, LTCL cannot be set off against STCG (Short Term Capital Gain). Thus, in this case, Tax Loss Harvesting is not beneficial.

Hope this helps :slight_smile:

Tax harvesting dought-i had profit in STCG for yr 2020-2021 and now in yr 2021-22 I had unrealistic loss in my portfolio,can I use this unrealistic loss in yr 2022-22 to save my tax in yr 2020-21,if so please help me

Hey @kishore_varma, you can find out the details related to tax loss harvesting in this article: