Tax harvesting: book ₹1.25 lakh of gains tax-free every year

Tax harvesting is a simple, legal way to use your ₹1.25 lakh annual equity LTCG exemption — so you pay less tax over your investing lifetime.

How it works

Each financial year, equity LTCG up to ₹1.25 lakh is tax-free. If you've held units for over a year and have unrealised gains, you can:

• Sell enough units to realise about ₹1.25 lakh of long-term gains — paying zero tax.
• Buy back the same units soon after.

This "resets" your purchase price higher, so future gains are calculated from a higher base — shrinking the taxable gain when you eventually sell for real.

Things to watch

• Only worth it if you actually have over ₹1.25 L of long-term gains that year.
• Mind any exit load and the gap between sell and buy (the market can move).
• Do it before 31 March — the exemption doesn't carry forward.

→ Track your holdings and gains in your Portfolio. (General information, not tax advice.)