Tax-Gain Harvesting Planner
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Runs entirely in your browser — your numbers never leave this page.
How it works
Every financial year, your first ₹1.25 lakh of long-term equity gains is tax-free — and unused exemption evaporates on March 31. Tax-gain harvesting simply uses it: sell enough units to realise ~₹1.25L of gains, immediately rebuy the same fund, and your cost base steps up tax-free.
On ₹8L of gains, harvesting over 3+ years can legally erase ₹80,000+ in tax. The portfolio barely changes — same securities, higher cost basis, zero tax leakage.
Rules that matter: only long-term units (>12 months) qualify; rebought units restart their 12-month clock (so do not harvest what you might sell within a year); and mind exit loads and STT on the churn. Set a February calendar reminder — March rush is real.
Frequently asked questions
What is tax-gain harvesting?
Selling equity investments to realise up to ₹1.25L of long-term gains each year (tax-free), then immediately rebuying. It resets your cost basis higher, shrinking future taxable gains — all legal.
Is it legal? Feels like a loophole.
Completely legal — you are paying tax exactly as the law prescribes and using an exemption Parliament created. Wash-sale rules (like the US has) do not exist in India for this.
How much can I save?
Up to 12.5% (+cess) of gains shifted under the exemption. ₹8L gains harvested over 7 years = zero tax vs ~₹87,750 lump-sum. The planner above computes your case.
Does it work for short-term gains?
No — only long-term holdings (equity held >12 months) get the ₹1.25L exemption. STCG has no exemption to harvest against.
When should I harvest each year?
February is ideal — full-year gain visibility, no March rush. Harvesting in April wastes the previous year's exemption.
What are the costs of harvesting?
STT on sale (~0.1%), possible exit loads (<1 yr holdings — but those are short-term anyway), and the rebought units restart their 12-month LTCG clock.
Can I harvest mutual funds too?
Yes — equity mutual funds work identically. Sell units with the oldest purchase dates first (FIFO) to ensure long-term status.
What if my gains exceed ₹1.25L × years?
Harvest the exempt portion yearly and pay 12.5% on the rest — partial harvesting still beats none. Or extend the plan over more years.
Does harvesting affect my asset allocation?
No — you rebuy the same securities immediately. It is a tax operation, not an investment change. Do not "harvest" into a different fund unless you wanted to switch anyway.
Can NRIs harvest?
The ₹1.25L exemption applies to NRIs on Indian equity too, so the mechanics work — but check DTAA and your country of residence's tax treatment of the sale.