Tax Loss Harvesting Calculator – Offset Capital Losses & Save Tax

Calculate how much tax you can save by offsetting capital gains using losses as per Indian Income Tax rules. Updated for Budget 2024 Statutory Rules (12.5% LTCG / 20% STCG).

Free • Instant • No Signup • Private • Built for India

Capital Gains & Losses

Equity Tax: 12.5% / 20%

Equity Taxation Rules (Latest)

STCG (<12m): 20%

LTCG (>12m): 12.5%

LTCG Exemption: ₹1.25 Lakh/yr

Loss Set-off Rules

STCL → Offset both STCG & LTCG

LTCL → Offset LTCG only

Carry Forward: 8 Years

Total Tax Saved

₹0

Tax Without Harvesting

₹0

Tax After Harvesting

₹0

Final Tax Liability Amount Saved
Final: ₹0 Saved: ₹0

Carry Forward Loss

₹0

Tax reduction %

0% Saved

What is Tax Loss Harvesting?

Tax Loss Harvesting is a legal financial strategy where an investor sells securities (like stocks or mutual funds) that are currently trading at a loss to offset the capital gains tax liability of other profitable investments. By "realizing" these losses, you can reduce the net taxable income in your annual tax planning.

In India, this is a popular strategy to optimize the portfolio before the end of the financial year (March 31st). Since the introduction of 12.5% LTCG on equity in Budget 2024, harvesting has become even more critical for long-term Retirement Planning.

Tax Harvesting Example: ₹3 Lakh LTCG

Suppose you have booked a Long Term Capital Gain (LTCG) of ₹3,00,000. You also hold a stock that is currently down by ₹1,00,000.

  • LTCG Gain: ₹3,00,000
  • ₹1.25L Exemption: - ₹1,25,000
  • Taxable Gain (Before Harvesting): ₹1,75,000
  • Realized Loss (Harvested): - ₹1,00,000
  • Final Taxable Gain: ₹75,000

By harvesting the ₹1 Lakh loss, you only pay tax on ₹75,000 instead of ₹1,75,000, saving you over ₹13,000 (including Cess) in actual cash.

When to Use Tax Loss Harvesting

Year-End Planning

Most investors review their realized gains in March and sell loss-making stocks to reduce the final tax bill before the financial year ends on March 31st.

Portfolio Rebalancing

When rebalancing from equity to debt (or vice versa), use losses in underperforming segments to offset the gains from the profit-making segments.

Frequently Asked Questions

What is tax loss harvesting?
It is selling loss-making investments to reduce your net capital gain, thereby paying lower capital gains tax.
Is tax loss harvesting legal in India?
Yes, it is a valid tax planning strategy allowed under the Income Tax Act for set-off and carry-forward of losses.
Can STCL offset LTCG?
Yes, Short Term Capital Loss (STCL) can be set off against both Short Term and Long Term Capital Gains.
Can LTCL offset STCG?
No. Long Term Capital Loss can only be set off against Long Term Capital Gains. It cannot be used to reduce STCG.
How many years can losses be carried forward?
Both STCL and LTCL can be carried forward for 8 assessment years provided the tax return is filed before the due date.

Related Financial Tools

Cap Gains Tax

SIP Tool

CAGR Tool

Income Tax

Net Worth

Disclaimer

Tax laws in India are subject to frequent changes. This calculator uses current rules for equity set-offs. 4% health and education cess is included. Surcharge for high income individuals (above ₹50L) is not included. Always consult a Qualified Chartered Accountant for final tax filing.

Last Updated: March 2026