Tax Loss Harvesting - Definition - Tax Loss Harvesting ( TLH ) is the act of booking unrealized losses on stocks or mutual funds to reduce taxable gains and minimize tax payable. Set-Off Rules - Long-Term Capital Loss ( LTCL ) - Can be set off only against long-term capital gains ( LTCG ). Cannot be set off against short-term capital gains ( STCG ). Short-Term Capital Loss ( STCL ) - Can be set off against either STCG or LTCG. Carry Forward Losses - If losses cannot be fully set off in the same financial year: Both STCL and LTCL can be carried forward for 8 assessment years. Tax Rates - #stcg - 15% of the gain ( till July 22, 2024 ). 20% of the gain ( post July 22, 2024 ). #ltcg - Tax-free up to ₹1.25 lakh annually. Above ₹1.25 lakh - Taxed at 10% ( till July 22, 2024 ). Taxed at 12.5% ( post July 22, 2024 ). Execution Guidelines - Sell today, buy tomorrow - Sell between 3:15-3:30 PM. Buy back between 9:15-9:30 AM ( next day ). Avoid high volatility periods - Refrain from TLH during high volatility weeks to avoid losses from gap ups/downs. Purpose over greed - TLH is meant to reduce taxes, not for trading profits. FIFO ( First In, First Out ) Rule - When selling partially, FIFO is applied to calculate realized loss. Realized loss might differ from the overall loss displayed in holdings. Check detailed breakdown reports for accuracy (provided by most brokers). Disclaimer - This is not professional tax advice. Consult a Chartered Accountant ( CA ) or taxation expert for precise calculations. This post is educational and not a recommendation to buy / sell stocks or mutual funds. #taxrelief #taxpayermoney #tax