_*📚📚Tax Loss Harvesting*_

*Definition - Tax Loss Harvesting ( TLH )* is the act of booking unrealized losses on stocks or mutual funds to reduce taxable gains and minimize tax payable.

*Set-Off Rules:*

Long-Term Capital Loss ( LTCL ) - 

*CAN BE SET OFF ONLY against long-term capital gains ( LTCG ).*

Cannot be set off against short-term capital gains ( STCG ).

Short-Term Capital Loss ( STCL ) - 

*CAN BE SET OFF against either STCG or LTCG.*

*Carry Forward Losses* - If losses cannot be fully set off in the same financial year: 

*Both STCL and LTCL can be carried forward for 8 assessment years.*

*Tax Rates :*

# *STCG* - 15% of the gain ( till July 22, 2024 ).

*20% of the gain ( post July 22, 2024 ).*

*# LTCG :*

_*"Tax-free up to ₹1.25 lakh annually."*_

Above ₹1.25 lakh - 

Taxed at 10% ( till July 22, 2024 ).

*Taxed at 12.5% ( post July 22, 2024 ).*

*Execution Guidelines :*

Sell today, buy tomorrow - 

Sell between 3:15-3:30 PM.

Buy back between 9:15-9:30 AM ( next day ).

*Avoid high volatility periods* - Refrain from TLH during high volatility weeks to avoid losses from gap ups/downs.

*Purpose over greed* - TLH is meant to reduce taxes, not for trading profits.

*FIFO ( First In, First Out ) Rule* - When selling partially, FIFO is applied to calculate realized loss.

_*Realized loss might differ from the overall loss displayed in holdings.*_

Check detailed breakdown reports for accuracy (provided by most brokers).

*_"Disclaimer - This is not professional tax advice. Consult a Chartered Accountant ( CA ) or taxation expert for precise calculations."_*

❌This post is educational and not a recommendation to buy / sell stocks or mutual funds.

#taxrelief

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