{"id":899847,"date":"2026-04-17T14:14:29","date_gmt":"2026-04-17T19:14:29","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/04\/17\/tax-harvesting-explained-smart-way-to-lower-capital-gains-tax-before-march-31\/"},"modified":"2026-04-17T14:14:29","modified_gmt":"2026-04-17T19:14:29","slug":"tax-harvesting-explained-smart-way-to-lower-capital-gains-tax-before-march-31","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/04\/17\/tax-harvesting-explained-smart-way-to-lower-capital-gains-tax-before-march-31\/","title":{"rendered":"Tax harvesting explained: Smart way to lower capital gains tax before March 31"},"content":{"rendered":"

Home<\/a><\/span>Personal Finance News<\/a><\/span>Tax harvesting explained: Smart way to lower capital gains tax before March 31<\/span><\/p>\n

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You sell investments that are currently in loss so that this loss can cancel out the profits you made from other investments.<\/h2>\n<\/p>\n
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By CNBCTV18.com\u00a0<\/span>March 27, 2026, 1:03:20 PM IST (Updated)<\/span><\/span><\/p>\n<\/div>\n

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<\/span>3 Min Read<\/span><\/p>\n

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With the financial year ’26 coming to an end, many investors are rushing to find ways to save on tax before the March 31 deadline.<\/p>\n

\nOne strategy gaining attention is tax harvesting.<\/a> This is a smart way to reduce capital gains tax liability.<\/p>\n

What is tax harvesting?<\/strong><\/p>\n

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\nTax harvesting, also called tax-loss harvesting, is a simple way to reduce the tax you pay on your investments. You sell investments that are currently in loss so that this loss can cancel out the profits you made from other investments.<\/p>\n

\nFor example, you earned a profit from some shares or mutual funds this year. Normally, you would have to pay tax<\/a> on that profit. But if you also have some investments that are in loss, you can sell them before March 31 and set them against the loss. This loss is then adjusted against your profit, so your total taxable gain becomes lower.<\/p>\n

How does tax harvesting work?<\/strong><\/p>\n

\nCapital gains are of two types: Short-term capital gains (1 year or less) and long-term capital gains (more than 1 year). Both are taxed differently.<\/p>\n

\nIf you sell shares within 1 year, the profit is taxed at 15%, and if you sell after 1 year, gains up to \u20b91 lakh are tax-free, and anything above that is taxed at 10%.<\/p>\n

Tax harvesting<\/a> helps investors use this system smartly. So, if someone has long-term gains within the \u20b91 lakh limit, they can sell their investments and buy them again immediately. Since the gains are within the tax-free limit, no tax is paid, but the purchase price resets at a higher level. This can help reduce tax in the future.<\/p>\n

\nHowever, there is a key rule that the transaction must be properly sold from your demat account. If you buy and sell on the same day in the same account, it is treated as an intraday trade, where no actual delivery happens. Such trades are not considered valid for tax harvesting and won\u2019t give you tax benefits.<\/p>\n

\nAt the same time, if your losses are more than your gains then investors can carry forward these for up to eight years and used later to save tax. However, this is allowed only if the income tax return is filed on time.<\/p>\n

\nAccording to Mumbai-based CA and CFP Balwant Jain, “Tax harvesting for claiming initial \u20b9<\/span>1.25 lakh of tax-free LTCGs can be done by March 31. If you book higher LTCGs, you will have to pay tax at a flat rate of 12.5% on the remaining amount.”<\/p>\n

\n“Even if you book higher capital loss, the unabsorbed loss can be carried forward for set-off against capital gains in subsequent years,” he said.<\/p>\n<\/div>\n

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(Edited by : Sudarsanan Mani)<\/span><\/p>\n

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First Published:\u00a0<\/p>\n

Mar 27, 2026 12:58 PM<\/p>\n

IST<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

Puja Menon
Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Home Personal Finance News Tax harvesting explained: Smart way to lower capital gains tax before March 31 You sell investments that are currently in loss so that this loss can cancel out the profits you made from other investments. By CNBCTV18.com\u00a0 March 27, 2026, 1:03:20 PM IST (Updated) 3 Min Read With the financial year<\/p>\n","protected":false},"author":1,"featured_media":899848,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23353,23853],"tags":[7646,113711],"class_list":{"0":"post-899847","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-explained","8":"category-harvesting","9":"tag-explained","10":"tag-harvesting"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/899847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=899847"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/899847\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/899848"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=899847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=899847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=899847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}