Tax-Loss Harvesting Calculator
Tax-loss harvesting is selling loss-making holdings to set the losses off against gains you have already booked, cutting this year's tax — you can buy the position back afterwards if you still want it. India's set-off rules have a direction: short-term losses absorb both short- and long-term gains, but long-term losses absorb only long-term gains.
Enter your realised gains and the losses you could harvest. The calculator applies the set-off in the tax-optimal order, respects the ₹1.25 lakh LTCG exemption, and shows tax before, tax after, and the saving.
How it works
- Long-term losses set off against long-term gains only; short-term losses set off against short-term gains first, then any remainder against long-term gains.
- The ₹1.25 lakh exemption applies to the net LTCG after set-off — harvesting gains that were already inside the exemption saves nothing.
- Tax uses current rates: STCG 20%, LTCG 12.5%, + 4% cess; unabsorbed losses carry forward 8 years.
Frequently asked questions
Does India have a wash-sale rule?
There is no statutory wash-sale rule for listed equity — repurchasing the same stock after booking the loss is generally accepted. Practical care: demat sales match FIFO, so a same-day buyback can pair the wrong lots; most practitioners repurchase after delivery (T+1) to keep the loss clean.
When should I harvest — and when is it pointless?
Before 31 March, since set-off happens within a financial year (unabsorbed losses then carry forward). It is pointless to harvest losses against LTCG that is already under the ₹1.25 lakh exemption — that gain was tax-free anyway; the calculator makes this visible by taxing the net, not the gross.
Why won't my long-term loss reduce my short-term gain?
The Income Tax Act only permits LTCL to be set off against LTCG (Section 74). STCL is the flexible one — it absorbs either. This asymmetry is why, when choosing which lots to sell at a loss, lots held under 12 months are usually more valuable to harvest.
What happens to losses I can't use this year?
They carry forward up to eight assessment years and keep their character (STCL stays flexible, LTCL stays LTCG-only). One hard condition: the return for the loss year must be filed by the due date, or the carry-forward is forfeited.
Related tools
Know your P&L the moment news breaks.
Harvesting decisions start with knowing what moved and why. MarketPing alerts you to every filing on your holdings — AI-summarised, with price impact — on WhatsApp.
This tool is an educational estimate, not investment or tax advice. Rates and rules change — verify current figures and consult a professional before acting.