Tax Loss Harvesting Calculator India: Capital Gains

Tax loss harvesting means selling an investment at a loss and checking whether that loss can offset eligible capital gains. This calculator uses manually entered Indian equity gain and loss totals. Its carry-forward loss can be overstated, “Tax Saved” can include relief from losses already booked, and “Total Losses Used” can include unused losses. It does not identify holdings to sell. Use the examples to understand these limits; have a chartered accountant (CA) check an actual return.

Indian capital-loss rules, with the tax period clear

The Income Tax Department says the Income-tax Act, 2025 applies from 1 April 2026, while earlier periods continue under the earlier Act. The rules below refer to the new Act’s published provisions checked on 16 October 2026. Rates are limited to their qualifying asset and transaction conditions.

The lower long-term rate and threshold do not describe every asset. The cited sections cover qualifying equity shares, equity-oriented fund units and business trust units, with their stated conditions. This form has no asset-type or tax-year selector to verify eligibility.

There is also a holding-period boundary to check. For listed securities and the relevant equity-oriented fund units, the statutory short-term definition includes holdings of not more than 12 months. The form’s help text labels the long-term side as starting at 12 months; do not use that shorthand to classify a boundary-date sale.

How tax loss harvesting works in India

You sell an investment that is below your buying price. The loss is a capital loss. It is then used to reduce capital gains from other sales in the same year, so the tax on those gains falls. For listed shares and equity funds the gains are taxed at 20% (short-term) and 12.5% above ₹1.25 lakh (long-term). A ₹30,000 loss set against short-term gains therefore cuts the tax by ₹6,000 (30,000 × 20%), before cess.

Harvesting changes when and where you pay tax. It does not remove a loss on your investment. You still own less than you paid for, and a sale has costs. The tool on this page only compares the tax figures. It does not say what to sell.

Which loss offsets which gain, with an example

Illustrative case, with made-up numbers: short-term gain ₹30,000, long-term gain ₹2,00,000 and a short-term loss of ₹40,000. The loss first removes the ₹30,000 short-term gain. The remaining ₹10,000 reduces the long-term gain to ₹1,90,000. Taxable long-term gain is ₹1,90,000 − ₹1,25,000 = ₹65,000, so tax is ₹65,000 × 12.5% = ₹8,125. Without the loss the tax would be ₹30,000 × 20% + ₹75,000 × 12.5% = ₹6,000 + ₹9,375 = ₹15,375. The saving is ₹7,250, before cess.

The six controls collect totals, not trades

Enter gains and losses as positive magnitudes in the appropriate fields. An unrealised loss is a fall in the value of an asset still held. Merely typing that amount does not realise a tax loss. The model assumes it has been realised when calculating the scenario.

Do not enter an amount already netted against a gain again as a separate loss. Keep money classified as business income out of these capital-gain fields. The capital gains versus business income guide explains why classification comes before choosing a calculator.

Worked case that matches the tool

Illustrative qualifying equity case: short-term gains ₹100,000; long-term gains ₹200,000; no already booked short-term or long-term losses; proposed short-term loss ₹30,000. Assume the special rates apply in full and ignore cess, surcharge, trading costs and personal adjustments.

• Original short-term base tax: ₹100,000 × 20% = ₹20,000.
• Original taxable long-term amount: ₹200,000 − ₹125,000 = ₹75,000.
• Long-term base tax: ₹75,000 × 12.5% = ₹9,375.
• Tax Without Harvesting: ₹20,000 + ₹9,375 = ₹29,375.
• Net STCG After Offset (short-term capital gain after losses): ₹100,000 − ₹30,000 = ₹70,000.
• Tax After Harvesting: ₹70,000 × 20% + ₹9,375 = ₹23,375.
• Tax Saved in this limited case: ₹29,375 − ₹23,375 = ₹6,000.

With those inputs the cards also show Adjusted LTCG (long-term capital gain) of ₹75,000, Total Losses Used of ₹30,000 and Losses to Carry Forward of zero. No tax return or actual sale is created. The monetary outputs are rounded to whole rupees.

An estimated tax reduction is different from recovering an investment loss. In this example, ₹30,000 of assumed loss produces ₹6,000 of base-tax difference under the model. Transaction costs, future tax basis and changed market exposure still matter to the real decision.

Why Tax Saved is not always the extra harvesting benefit

The starting “Tax Without Harvesting” calculation ignores the losses entered in Short Term Capital Loss and Long Term Capital Loss. The after calculation uses them. If you enter losses already realised, some displayed saving therefore comes from those existing losses, even when proposed unrealised loss is zero. Also, “Total Losses Used” sums all entered existing and proposed losses, including amounts the model says are unused. It does not show only the loss absorbed against gains.

For a cleaner model comparison, record one run with the proposed loss set to zero, then another run changing only that proposed amount and its type. Compare the two after-tax figures. This isolates the model’s incremental change, but does not repair its loss-set-off and carry-forward limitations.

The Harvesting Status and Strategy phrases are preset labels. They do not evaluate a holding’s prospects, transaction costs or suitability. A recommendation appearing in a result card is not evidence that selling an investment is appropriate.

Carry forward and late filing

Capital losses that you cannot use in a year can be carried forward for up to eight years. Sources agree this needs a return filed on time. A return filed after the due date generally gives up the carry-forward. The balance this tool prints as a carry-forward can be too high, as explained below, so do not copy it into your return.

The long-term threshold is not a loss balance

Illustrative boundary case: ₹150,000 of long-term gains, ₹50,000 of already realised long-term loss and no other gains or losses. Capital-loss set-off leaves ₹150,000 − ₹50,000 = ₹100,000 of gain. Being below the ₹125,000 tax threshold does not turn that positive gain into an unabsorbed loss.

The tool instead starts from ₹150,000 − ₹125,000 = ₹25,000, uses only that amount of the entered loss and prints ₹25,000 carry-forward. That output needs correction. Its displayed saving can also include this already realised loss, despite no new harvesting in this case.

Section 111 sets the carry-forward period; it does not make every balance printed by a calculator eligible. Ask a CA to establish the actual unabsorbed amount, its category, remaining time and filing conditions.

What is outside this calculation

• Other capital-gain categories and their separate rates or conditions.
• Personal basic-exemption adjustments expressly described in the special-rate sections.
• Applicable cess, surcharge, rebates and the full income-tax return calculation.
• Remaining life and eligibility of losses brought forward from earlier years.
• Purchase and sale dates, tax lots, transaction costs and execution outcomes.

Loss harvesting and realising gains within an available threshold are different exercises. This form models proposed losses; it does not select profitable holdings to reset their tax cost. A paper loss also cannot be used just because it appears in a portfolio screen.

The STCG and LTCG calculator covers another limited tax comparison. For a simple value-change calculation before tax, use absolute returns. Keep their assumptions separate.

US wash-sale timing belongs to a different tax system. The US wash sale calculator explains that system’s restriction and exceptions. This Indian form has no repurchase-date or legal-eligibility check; it cannot determine the treatment of a proposed sale and repurchase.

Harvesting the ₹1.25 lakh long-term exemption

Long-term gains up to ₹1.25 lakh in a financial year are exempt on qualifying equity. Some investors sell shares that carry a long-term gain close to that limit and buy them back, so the new purchase price is higher and later gains are smaller. The exemption is yearly and unused room does not carry forward. This is sometimes called tax gain harvesting.

Costs matter. Equity delivery STT is 0.1% on each side, so selling and rebuying ₹5,00,000 of shares costs ₹500 on the sale and ₹500 on the purchase, plus brokerage and other charges. The rebought shares start a new holding period, so selling them within 12 months would be a short-term gain taxed at 20%. This tool is a loss calculator and does not model this exemption exercise; see the STCG LTCG tax calculator for a plain gain estimate.

Selling and buying back: is there a wash-sale rule in India

Several broker explainers say India has no wash-sale rule like the US one, so no loss is automatically disallowed when you repurchase. They also warn that a sale and repurchase made only to create a tax loss, with no real change in your position, can attract scrutiny under the general anti-avoidance rules. Whether a particular trade is acceptable is a question for a CA. This page does not suggest any trade.

F&O losses are a different kind of loss

Profit or loss from index and stock futures and options is generally treated as business income, not as capital gains. A business loss is therefore not an input for this capital-gains tool. Capital losses cannot be used against business profits. Business losses may be usable against capital gains in some cases, so ask a CA before you net them. The capital gains versus business income glossary page explains the split.

Year-end checklist and settlement timing

• List your realised gains and losses for the financial year from your broker's capital gains statement and compare with your own records.
• Note that equity trades have settled on T+1 since 27 January 2023, meaning one trading day after the trade. Tax is generally counted on the trade date, but ask a CA about the cut-off.
• Check that an NSE or BSE holiday does not fall on the last day of March before you plan a sale.
• Remember that a sale during the last week also needs margin, brokerage and STT, which reduce the benefit.
• Keep the statement. A loss you want to carry forward must be shown in a return filed by the due date; a belated return generally loses the carry-forward.

A common question is how late you can book a loss. The financial year ends on 31 March, so a sale must happen by the last trading day on or before that date. Check the exchange holiday list for the actual day.

Sources

• Income Tax Department Section 196: qualifying short-term gains; checked 16 October 2026.
• Income Tax Department Section 198: qualifying long-term gains; checked 16 October 2026.
• Income Tax Department Section 108: same-head loss set-off; checked 16 October 2026.
• Income Tax Department Section 111: capital-loss carry-forward; checked 16 October 2026.
• Income Tax Department Section 2: asset holding-period definitions; checked 16 October 2026.
• Income Tax Department Objective and scope of the new Act; checked 16 October 2026.
• OneTradeJournal Tax Loss Harvesting Calculator inputs; checked 16 October 2026.