Comment on Tax loss harvesting

Srini commented on 15 Jul 2016, 12:27 AM


How to save/optimize on tax given the following:

I had bought shares of company X, which gave a 1:1 bonus.
The price of shares became half, though the portfolio size remained the same.
I want to book 50% short term loss by selling the per-bonus shares.
Since the price of the post-bonus shares is 0 they will be considered 100% capital gains(short/long depending on duration held), so I don’t want to sell them.
After selling and booking short term capital loss, I want to buy the shares again.

Just wondering if the following is possible…

Attach two demat accounts to trading account, lets call them primary and secondary.
When I buy shares they get credited to my primary demat account.

Post selling the per-bonus shares in the above scenario, transfer the post-bonus shares to the secondary demat account.
Then the shares bought post booking the short term capital loss can be sold-bought without any hassle(of attracting capital gains).

I would like to know if the above is possible. If yes, which depository participant offers the lowest transfer charges and how much?

If the above isn’t possible, what is the best way to isolate the bonus shares(buy price = 0).


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