Is tax harvesting a good idea?

Since the tax imposition on long-term capital gains (LTCG), individuals have been seeking ways to minimise their tax burden, especially as the financial year draws near. This has led to the exploration of strategies such as tax harvesting, allowing investors to utilise the tax exemption on LTCG, potentially lowering their overall tax liability. The Union Budget in 2018 imposed a 10 per cent tax on long term capital gains (LTCG) on realised equity gains over Rs 1 lakh in a financial year. But there's an exception to it. The LTCG on equity up to Rs 1 lakh in a financial year is tax-exempt. What is tax harvesting? Tax harvesting is utilising the tax-free window of Rs 1 lakh to reduce overall LTCG tax

This article was originally published on May 03, 2022.