Hello @Hitesh_Sathawane,
Tax loss harvesting helps reduce your capital gains tax by using investment losses to offset profits. If markets turn bullish, harvested losses from previous years can be carried forward for up to 8 years to reduce future capital gains tax liabilities.
The principles and benefits of this strategy:
You sell investments at a loss to book capital losses, which then reduce your net capital gains, lowering your tax. For example, a ₹1,00,000 short-term capital loss can reduce a ₹2,00,000 short-term capital gain to ₹1,00,000, saving tax on the ₹1,00,000. You can read this detailed guide here: What is Tax Loss Harvesting? How to save taxes using losses
And for smart savings,
Review your portfolio before the financial year-end to identify loss-making investments. You can then sell these and, if desired, reinvest in similar assets the next day, avoiding immediate re-purchase to prevent it being deemed an intraday trade. We also have a detailed guide on how to fully utilize the ₹1.25 lakh exemption on LTCG every year: Tax Gain Harvesting: Save Tax on Long-Term Capital Gains