Comment on Tax loss harvesting opportunity - FY 2017/18

Gaurav Gera commented on 27 Mar 2018, 03:10 PM

This is the equation according to you.
“For example, assume you have made Rs. 1lk in short-term capital gains this year. You will need to pay 15% of this as taxes or Rs. 15000. Also, assume that you currently hold stocks which are having an unrealized loss of Rs. 60,000. You can sell these stocks to reduce your net STCG to Rs 40,000. You would hence have to pay 15% of Rs. 40,000 or Rs. 6,000 as taxes – saving you Rs. 9,000 in taxes. This exercise will let you harvest your losses and save on taxes – hence called tax loss harvesting.”

My question is in order to save 15000 bucks as a tax, one has to sell his or her stocks worth rupees 60000. You have definitely saved 9000 bucks but you have lost 60000 bucks too.

Can you please clarify the same or I’m missing something here ?


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