Whatsinthename
Whatsinthename
Stealth

Tax harvesting- Save 10,000 in taxes before March ends

Tax harvesting is a strategy of selling your equity units to book long-term capital gains and reinvesting the proceeds in the same stock.

You have to pay tax @ 10% on long term gains(On gains >1L) arising from sale of listed equity shares/mutual funds.

You can book profits on stocks held for more than 12 months upto Rs. 1 lakhs in a financial year, long term profits upto 1 Lakh in a FY are exempt from taxes under income tax act. You can reinvest the proceeds again in the same stock hence having that stock in your long term portfolio.

LTCG: Held for >12 months

Please note you will be incurring a small amount in brokerage and other charges.

9mo ago
majboormajdoor
majboormajdoor
Stealth9mo

Another underrated advice: If you have been investing since 7-10y+, after every year or two, open up another folio and invest in the same fund.

At the time of rebalancing or redemption, sell from your most recent Folio to decrease the capital gains and preserve you old units.

WoodenAnger
WoodenAnger
Flyhomes9mo

How does it matter if I have old units or new if I have booked the profit and bought the units at the rate I sold at (basically I tax harvested)?

majboormajdoor
majboormajdoor
Stealth9mo

People generally rebalance or redeem partly. As in you might want to say sell 10L worth of your units.

A extreme example, If the units are very old, cap gain would be high, say 8L. For newest units, cap gains would be low, say 1L.

Taxes if you redeem the old units would be on 8L and higher VS taxes on the new units, which you have to pay ASAP.

You can only sell the newer units directly if they are in a separate folio.

But this only makes sense if you have been invested for more than 7-10y for Cap gains to accrue to high levels that you need to save taxes on

DaringTrain
DaringTrain
Stealth9mo

What to do if you incurred huge losses? Asking for a friend who invested in Paytm

eleCtrik
eleCtrik
SAP9mo

I'm that friend

DaringTrain
DaringTrain
Stealth9mo

I'm that friend

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