Hey,
Saving taxes using unrealised losses is now easier than ever. Here’s how we have simplified it for you:
Step 1: See potential tax savings
Get an overview of the amount of tax you can save
Step 2: Get the exact stocks to sell
Get a list of all loss-making stocks that can help you save taxes
Step 3: Take action
Decide what to sell and reduce your tax burden
In the next financial year, we’ll inform you about the stocks you sold, and you can buy them back if you like.
Let’s understand Tax Loss Harvesting with a simple example:
Let’s say you made a ₹70,000 short-term profit this year. At 20%, the tax on this profit will be ₹14,000.
But if you sell stocks with an unrealised loss of ₹30,000:
Your taxable profit drops to ₹40,000
Your tax burden reduces to ₹8,000
That’s ₹6,000 saved in taxes on your investments.
This strategy is called Tax Loss Harvesting. It’s a simple way to reduce your tax liability by:
- Selling investments that are in loss
- Using those losses to offset your gains
- Paying tax only on the net profit
Keep these in mind:
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STCL (Short Term Capital Losses, realised within 1 year):
Use it to reduce taxes on any gains (short-term or long-term) -
LTCL (Long Term Capital Losses, realised over 1 year):
Use it to reduce taxes on long-term gains -
After offsetting losses, long-term capital gains up to ₹1.25 lakh are exempted from taxes
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After offsetting losses, you must pay tax on short-term capital gains
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Please consult your CA to review your tax liability and assist you in filing taxes as per your situation
The financial year is about to end in a few days.
If you’re eligible to save taxes via Tax Loss Harvesting, you will find a banner on the homepage of the Upstox app, simply click here and start reducing your tax burden!