Tax Harvesting Calculator
Enter your unrealised gains and losses and what you've already realised this year. You get the tax you can save by using this year's ₹1.25 lakh tax-free limit and booking losses, with a step-by-step plan. The LTCG and STCG calculators work out the tax on a single sale. It works for listed shares and equity mutual funds.
By Hardik Vegad, founder of WealthGamma · Last updated
Total potential tax saved
₹17,940
By harvesting up to ₹90,000 of tax-free LTCG and booking eligible losses before 31 March.
₹1,25,000 of the ₹1,25,000 tax-free limit used100%
Remaining tax-free limit
₹90,000
Tax-free LTCG to sell
₹90,000
Saved by booking gains
₹11,700
Saved by booking losses
₹6,240
Action plan before 31 March
- Sell ₹90,000 of unrealised LTCG and buy it back, to use your ₹1,25,000 tax-free limit and reset your purchase cost.
- Book ₹30,000 of losses to offset realised capital gains and save ₹6,240 in tax.
What is tax harvesting?
Tax harvesting means selling investments on purpose to cut your capital gains tax, then buying them back so you stay invested. There are two kinds. Gain harvesting books profits while they are still tax-free. Loss harvesting books losses to cancel profits you have already made.
It works because of how listed shares and equity mutual funds are taxed in FY 2026-27, at the rates set in the July 2024 Budget: long-term gains (held over 1 year) are tax-free up to ₹1.25 lakh a year and taxed at 12.5% above that, and short-term gains are taxed at 20%. The ₹1.25 lakh limit resets every 1 April. If you don't use it, it's gone.
Tax rules change. Check the current rates before you file.
How much tax can you save with tax harvesting?
Gain harvesting saves up to ₹15,625 a year per person, which is 12.5% of ₹1.25 lakh. With the 4% cess it comes to ₹16,250. A family of four with separate PANs and their own investments can save up to ₹65,000 a year.
The saving comes later, not today. Selling inside the limit costs no tax now, and buying back at today's price raises your buy price. When you finally sell for good, the gain is smaller by the amount you harvested. In the calculator's example, selling ₹5,00,000 of a ₹8,00,000 holding books ₹1,25,000 of gains and takes ₹16,250 off a future tax bill.
Do it every year and it adds up. Twenty years of harvesting avoids ₹3,25,000 of tax. If that money stays invested at 12% a year, it grows to about ₹11.71L.
Loss harvesting has no fixed cap. Every ₹1 lakh of loss set against short-term gains saves ₹20,800. Set against taxable long-term gains, it saves ₹13,000.
What is the difference between tax gain harvesting and tax loss harvesting?
Gain harvesting sells winners to use the tax-free limit. Loss harvesting sells losers to cancel taxable gains. You can do both in the same year.
| Gain harvesting | Loss harvesting | |
|---|---|---|
| What you sell | Units in profit, held over 1 year | Units in loss, any age |
| Why it works | First ₹1.25 lakh of long-term gains a year is tax-free | Losses cancel gains booked the same year |
| Most you can save | ₹16,250 a year, with cess | 20% or 12.5% of the loss, plus cess |
| When the saving shows up | Later, when you sell for good | This year's tax bill |
| Best time | Every year, before the end of March | A year when you have taxable gains |
How do you harvest gains, step by step?
Sell enough long-term units to book ₹1.25 lakh of gains, then buy the same investment back. In order:
- Add up the long-term gains you've already booked since 1 April. What's left of the ₹1.25 lakh is your room.
- Find units held for more than a year that are in profit. Mutual funds sell your oldest units first.
- Sell the amount the calculator shows. If a quarter of the holding's value is gain, you sell four times the gain you want to book.
- Buy back. For shares, buy on the next trading day. For mutual funds, reinvest once the redemption is processed.
India's Income Tax Act has no wash sale rule for delivery trades, so buying back the same investment is fine. But don't sell and buy the same share on the same day on the same exchange. The two trades are netted off as an intraday trade, no shares leave your demat account, and no gain is booked.
One thing changes after you buy back: the new units start a fresh one-year clock. Sell them within a year and the gain is short-term, taxed at 20%.
Which loss can be set off against which gain?
A short-term loss can cancel any capital gain. A long-term loss can cancel only long-term gains. Losses you can't use this year are carried forward for 8 years, as long as you file your return by the due date.
| Loss | Against short-term gains | Against long-term gains |
|---|---|---|
| Short-term loss | Yes | Yes |
| Long-term loss | No | Yes |
The calculator uses a short-term loss on short-term gains first, because that side is taxed at 20%. With ₹1,00,000 of short-term gains and ₹3,00,000 of long-term gains booked, the tax is ₹43,550. Booking a ₹50,000 short-term loss and a ₹60,000 long-term loss brings it down to ₹25,350, a saving of ₹18,200.
Watch the tax-free limit. A loss is set off before the ₹1.25 lakh exemption is applied, so a loss booked against gains that were already tax-free saves nothing. With ₹1,00,000 of long-term gains and no other gains, booking a ₹60,000 long-term loss saves ₹0, and the loss is used up. Keep it for a year when you have taxable gains.
What is the last date for tax harvesting?
The sale has to go through by the last trading day of March. 31 March itself can be a weekend or a market holiday, so check the calendar. For shares, the trade date is what counts. For mutual funds, the redemption has to get that day's NAV, which means placing it before the fund's cut-off time.
There's no need to wait for March. You can harvest in any month, and a market dip is a good time to book losses.
What costs reduce the tax you save?
Selling and buying back is not free. On a small holding, the costs can eat much of the saving:
- Exit load. Many equity funds charge about 1% on units sold within a year. That mostly hits loss harvesting, and the units you buy back start a new exit load period.
- STT, stamp duty and brokerage. Small on mutual funds. On shares, securities transaction tax alone is 0.1% each way.
- Time out of the market. Your money sits out for a day or more. Prices can move either way before you buy back.
- ELSS lock-in. Tax-saving fund units are locked for 3 years and can't be sold before that.
What does this tax harvesting calculator not cover?
It covers listed shares and equity mutual funds, with cess. It leaves out:
- Debt funds. Gains on debt funds bought on or after 1 April 2023 are taxed at your slab rate, with no ₹1.25 lakh limit.
- Surcharge. It applies if your total income is above ₹50 lakh.
- Grandfathering. For shares and funds bought before 31 January 2018, gains up to that date are not taxed.
- Low income. If your other income is below the basic exemption limit, part of your gains fills that gap first. The section 87A rebate doesn't apply to these gains.
- Losses from earlier years. Carried-forward losses reduce this year's gains too. Take them off the gains you enter.
This is maths, not tax advice. For a large sale, check with a chartered accountant. To see what your money could grow to, use the SIP calculator.
Frequently asked questions
What is tax harvesting?
Tax harvesting means selling investments on purpose to cut your capital gains tax. You either book long-term gains inside the ₹1.25 lakh a year that is tax-free, or book losses to cancel gains you have already made.
How much tax can I save with tax harvesting?
Gain harvesting saves up to ₹15,625 a year per person, or ₹16,250 with cess: 12.5% of the ₹1.25 lakh long-term exemption. Loss harvesting saves 20% of a loss set against short-term gains and 12.5% against taxable long-term gains.
Is tax harvesting legal in India?
Yes. Selling an investment and buying it back is a real sale and a real purchase. The Income Tax Act has no wash sale rule for delivery trades. Don't sell and buy the same share on the same day, because that is treated as an intraday trade.
When should I do tax harvesting?
Any time in the financial year, as long as the sale goes through by the last trading day of March. Don't leave it to 31 March, which can be a market holiday. The exemption doesn't carry over, so an unused year is lost.
Can I buy back the same mutual fund or share after selling?
Yes. For shares, buy back on the next trading day. For mutual funds, reinvest once the redemption is processed. The units you buy back start a fresh one-year clock.
Can a short-term loss be set off against long-term gains?
Yes. A short-term capital loss can be set off against short-term or long-term gains. A long-term loss can only be set off against long-term gains. Losses you can't use are carried forward for 8 years if you file your return on time.
Does tax harvesting work for SIPs?
Yes, but only SIP instalments older than one year count as long-term. Mutual funds sell your oldest units first, so a redemption takes the long-term units before the recent ones.