How to save tax in 2025? | Tax Harvesting | CA Rachana Ranade

"for long term capital gain it is 125000 now what do I mean by this for example lets say I have a short term capital gain of 00 will I have to pay tax on this 100% yes ok 10000 multiplied by 20 but that is the tax I will have to pay ok but had it been a long term capital gain of ₹2000000 will I have to pay tax no why up to 125000 I get an amount so lets take again a simple example ok lets say my capital gain is exactly ₹125000 how much is the amount ₹125000 so my capital gain will come down to zero and obviously tax will also be zero right case number to assume my long term capital gain is ₹2000000 right and my amount I mean not my amount amount for any one will be ₹125000 so what is my long term capital gain long term capital gain will be ₹5000 in this case and on this I will have to pay a tax of 12.5"

"I am going to talk about my target of nifty in 2027"

"how much capital gain would i want to book to the extent of ₹1 25000 why are i told you no for long term capital gain up to ₹125000 it is tax free ok so i am going to book i am going to realise a capital gain to the extent of ₹1 25000 long term capital gain"

"for example lets say I bought shares on the first of March 2023 how much rupees ₹ lakh worth shares I bought I sold these shares on the 16th of March 2025 at ₹10 25000 so what is my gain what is my capital gain it is ₹ 25000 simple tell here ok now as I told you in the beginning that tax free long term capital gain you will get an amount on long term capital gain to the tune of what ₹1 25000 and that is why my taxable Long term capital gain will be Rs.1 lakh Simply what is the tax rate Tax rate is Rs.12/2 per Rs.10 lakh * Rs.12 1/2 per Rs.10 lakh which comes to Rs.12500"

"I am going to show you a trick where the gain will exactly be Rs.225000 but tax will go down to zero and how does it happen with the help of tax harvesting Now lets have a look at this example Assume that the same person bought these shares Same shares worth Rs.1 lakh only on the same date But what did the person do differently He sold these shares at Rs.1 lakh on 10th of March 2024 Assume that this is the then market price of this Rs.1 lakh Okay what is again one lakh will this Entyas must yes Entyas free 1 lakh taxable long term capital gain zero tax rho na you will be like rachna why didnt we book it to the tune of ₹125000 of course in my example only the price is 9 lakh so the gain is itself 1 lakh but had it been 92000 lets say still I would have booked only to the tune of 1 lakh because till the previous year this amount was available only till ₹1 lakh ok this year that is financial year 24 4 25 the limit has been increased to 125000 simple deal here ok what important point has happened on 10th of march we sold the shares at 9 lakh but on 12th of march we have bought the shares same at ₹1 lakh so same 9 lakh Then sold it for 9 lakhs. I bought it. Now what happens one year later? 16th March 2025 I sell the shares at ₹125000. What is the gain? 125000. What is the tax free long term capital gain? Entirely this is because taxable LTCG will be zero and tax will be again zero. Now what happened? How much was the gain that I realised in the previous financial year? 1 lakh. How much gain did I realise in the previous financial year? 125000. So the total is 1 lakh. 125000. That is 225000. But the tax is zero."

"now assume that a person has started a his SIP on 1st of July 2023 ok on the first of every month this person has started an SIP of ₹1000000 and 10000 * 9 the amount is 90000 ok this is the amount which has been invested over this first nine months what happens in the next financial year the same has very systematically continued The SIP for the entire year is 2025 so he has been investing for the next 12 months and the amount of his investment is around ₹1 lakh ₹2000000 ok now what happens he thinks that I should have used the concept of tax harvesting may be some was in the beginning of 2024 only and I could have booked some gain here but no please understand he has been investing only for nine months in the financial year 2024 so if he plans to sell in March 24 that would have led to a short term capital gain so nothing could have been done in 2024 but could something be done in 2025 and the answer is yes ok now understand as well that this person decides to sell some part of his SIP on 10th of March 2025 ok now the question is it has to be a long term capital gain so could anything out of this be sold answer is no because this would be this would then fall within these 12 months so can I think about these nine months of money invested yes because lets take an example from 1st July 23 to 1st July 24 12 months are completed so now it will become a long term and we are talking about 10th of March 25 so 1st July 1st August 1st September lalala till 1st March 25 1st March 24 all these investments made would have become long term till 10th of March 2025 so I am talking about installments first nine installments ok so he is ready to sell first nine installments worth how much now this 90000 have turned to amazing ₹ 10000"

"can we even harvest tax in the case of short term capital gains ok so this is now loss harvesting in the context of short term capital gains short term capital losses lets take the example of a person who has invested only in two shares ABC Ltd and XVA Ltd only two holdings ok assume that in both the stocks he has invested 0000 on 24th of October or as at March 2025 the current value of the stocks is 80000 for ABC and 40000 for XVA so for A BC he is in a profit of 0000 and for Aqua he is in a loss of 00 now what could be possibility number one possibility number one lets take the same example on 10th of March this guy decides to sell ABC worth 80000 and he books a profit of 0000 on this 0000 he is going to pay a tax of % and that is the reason why he will have to pay 000 as short term capital gains tax ok what could be possibility number two possibility number two he says that I want to reduce my tax we and assume that he knows for a fact that Aqua is a fundamentally strong stock and he believes that even if this is at 0000 today this 50000 could even go to ₹1 lakh in the future okay so what can be done Is that why he can book this 0000 today ok so book a loss of 00 today today is 10th of March so what does he do is he go to book a loss of 00 so 4000 is the selling price simply lie now what would be the net capital gain for this person net capital gain will be 300000 min 00 so % of 00 so this person will have to pay only 000 tax o 4000 yes % tax will be composed are you ok to save 000 tax you ask me to book a loss of 10000 no no I will not do that what is suppose to be done immediately that is on our same in our example 12th of March this person should again buy shares worth 0000 ok so what happened his portfolio was intact with 0000 worth Shares and now what is that person going to do when this share turns into profit may be one year later to year later what ever is the case at that time this could this person could book the gain and guess if he holds for more than one year or up to ₹1 25000 that person is also going to get a gain so is that going to be amazing yes so I hope you have understood how loss can be booked to reduce current year's capital gains tax"

"number one in our example every time what did we say you could sell on 10th of March and you have to buy back on 12th of March as an example in simple words you have to keep one day clear if you buy and sell on the same day that will be treated as an intraday transaction and your tax gain and tax harvesting will be null if it you will not get the benefit of tax Harvesting right so ensure that you don't end up doing an intraday transaction"

"number two please ensure that whenever you are selling any share just to save taxes be sure that there is no clear breakout in that stock it could so happen that suppose you sell a share at 100 just to do tax harvesting in our example what have we taken if you sell a share at 100 you buy the same share at ₹1 only after a day but it could so happen that there is a great breakout in the stock and with in a day to that stock rises to 115 120 what ever and in that case you will end up paying more to buy the same stock and you could lose out on some of the benefits of this tax harvesting so ensure that there are no clear breakouts when ever you You are selling these shares for the purpose of gaining on some tax benefits"

"and ultimately ensure that there are no key corporate actions which are there on the day of selling. So, just as an example, when we were talking about selling the shares on 10th of March, if the company was going to pay you a dividend and the record date was 10th of March, what could happen is you could sell the shares only to get the tax benefit, but you lose out on the benefit of dividend. So, in the third case, you are actually harvesting your profits, but you lose out on the dividend income. So, ensure that just to gain something, you are not losing out on something."

"for long term capital gain it is 125000"

"Tax rate is Rs.12/2 per Rs.10 lakh * Rs.12 1/2 per Rs.10 lakh which comes to Rs.12500"

"I am going to talk about my target of nifty in 2027"

"investors sell their appreciation shares and mutual funds to realise guess so what is an investor going to do an investor is actually going to sell their shares and mutual funds and any capital asset to realise guess he is actually going to realise he is actually going to sell it and he is going to book the profit to the extent how much to the extent of tax free limits"

"loss harvesting in the context of short term capital gains short term capital losses"

"if you buy and sell on the same day that will be treated as an intraday transaction and your tax gain and tax harvesting will be null"