Tax-Loss Harvesting & ₹1.25L Exemption Calculator 2026
Calculate Long-Term (12.5%), Short-Term (20%) Capital Gains Tax & Tax-Loss Harvesting strategies for Indian mutual funds & stocks.
Portfolio Gains & Losses Simulator
FY 2026-27₹17,940
By harvesting up to ₹90,000 of tax-free LTCG and booking eligible loss offsets before March 31.
Recommended Action Plan for March 31
- Sell ₹90,000 of unrealized LTCG before March 31 to utilize your ₹1,25,000 annual tax-free window and reset your cost of acquisition.
- Book ₹30,000 in short-term losses to offset realized capital gains and save ₹6,240 in tax.
Tax Harvesting & Offset Ledger
| Optimization Step | Amount (₹) | Tax Saved (₹) | Section / Mechanism |
|---|---|---|---|
| 1. Tax-Free LTCG Exemption Harvest | ₹90,000 | + ₹11,700 | Sec 112A annual ₹1,25,000 window @ 12.5% + 4% cess |
| 2. STCL Set-Off Against Realized STCG | ₹30,000 | + ₹6,240 | Sec 70(2) STCL offsets STCG (saved @ 20% + 4% cess) |
| 3. STCL Set-Off Against Taxable LTCG | ₹0 | + ₹0 | Sec 70(2) unabsorbed STCL offsets LTCG |
| 4. LTCL Set-Off Against Taxable LTCG | ₹0 | + ₹0 | Sec 70(3) LTCL offsets taxable LTCG only |
| Net Overall Tax Benefit | — | ₹17,940 | Direct cash kept in your investment portfolio |
Tax Liability Comparison Before vs After Harvesting
Visual proof of reduced tax liabilities and realized tax savings.
The Tax-Loss Harvesting Playbook: Offsetting Profits to Compound Net Wealth
Tax-loss harvesting involves deliberately selling securities currently trading at a loss before the close of the financial year (March 31st) to offset realized capital gains. The recovered capital is then redeployed into comparable investment instruments to maintain market exposure while reducing your tax bill.
Set-Off Hierarchy (Section 70)
Short-Term Capital Losses (STCL) can offset both STCG and LTCG. Long-Term Capital Losses (LTCL) can only offset LTCG. Unutilized losses carry forward for up to 8 consecutive assessment years.
Annual Exemption Harvesting
Savvy investors also practice "tax-gain harvesting"—realizing up to ₹1.25 Lakhs of tax-free LTCG each year and immediately rebuying units to step up their cost basis without paying any tax.
Tax-Loss Harvesting FAQs
Key legal guidelines and execution best practices for Indian investors.
Does India have a "Wash Sale Rule" like the United States?
The Indian Income Tax Act does not contain a specific codified "wash sale rule" prohibiting the immediate repurchase of shares. However, transactions must carry economic substance and delivery on a recognized stock exchange to avoid General Anti-Avoidance Rule (GAAR) scrutiny.
Can I carry forward capital losses if I file my ITR after the deadline?
No. Under Section 80 of the Income Tax Act, you can only carry forward capital losses if you file your return of income on or before the statutory due date (July 31st). Filing a belated return permanently forfeits loss carry-forward rights.
How many years can unadjusted capital losses be carried forward in India?
Both short-term and long-term capital losses can be carried forward for up to 8 consecutive assessment years immediately following the year in which the loss was incurred.
Income Tax
Compare calculations across closely related financial tools in this category.
Direct Peer & Companion Calculators
6 tools available80C Tax-Saving & Exemption Solutions
Reduce your tax liability to ₹0 with government-backed 80C & 80CCD schemes.
Old vs New Tax Regime Break-Even Point 2026: The Deduction Threshold Chart
Exact deduction break-even thresholds from ₹7.5L to ₹50L CTC, Section 87A rebate rules, and why 90%+ taxpayers benefit from New Regime.