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Mar 28, 2025
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Equity tax-loss harvesting is a double-edged sword, make sure it works for you
You must have read articles floating on the internet encouraging you to book a loss in your equity and other investments to set off against capital gains made in the past and, thereby, reducing the tax liability. This strategy is popularly known as "tax-loss harvesting."
While one can defer the tax liability with this strategy, it is important to know that it comes with inherent risks. If adequate precautions are not taken while using this strategy, you may end up paying more income tax than before. For example, you may end up paying more taxes if your long-term capital gains are less than Rs. 1,25,000.
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