00:00Let's talk about the tax on the profit made from your investment, which includes the long-term capital gain tax and the short-term capital gain tax.
00:15If you are also incurring a loss, you can also make a profit from the loss-making share.
00:20How? We will understand that from Sharad ji.
00:23Sharad ji, there is a term called tax loss harvesting and tax gain harvesting.
00:27We would like to know in detail about this.
00:30What is it? When should it be used?
00:33Who can use it?
00:35How beneficial is it? What benefits can it bring?
00:40Tax harvesting means that before 31st March, if you earn from investment,
00:46suppose, tax harvesting is normally counted in equity shares.
00:50Equity shares means that suppose you have an income from equity shares and you are making a profit from those shares.
00:57Or suppose there are some shares where there is a loss.
01:01Now a days, the market has fallen a lot from 26,000 to 227,000.
01:05The market has recovered for 3-4-5 days.
01:08Even now, it is low from that peak.
01:10Suppose, you are sleeping.
01:11I meet a lot of investors who say that they are facing a loss.
01:14So, what you should do is that you should book your loss.
01:18After booking the loss, even if you enter again after 1st April,
01:22what will happen is that by booking the loss, you will face a long term capital loss.
01:25You can adjust the loss or you can carry forward the loss.
01:28And if you are making a profit, then also you can do tax harvesting.
01:32Then what you should do is that you should book the profit.
01:35There is a provision of harvesting in section 112k up to 1.25 lakhs.
01:40That means you get a tax exemption of 1.25 lakhs against the gains of equity shares.
01:47So, book your profit.
01:48Because you will not get a tax exemption until you book it.
01:51And if you want to keep that share for a long time, then you should buy it again.
01:56You should sell it for a time and re-enter it.
01:59By selling it, I don't mean that you should sell your investments because you want to do tax harvesting.
02:06It doesn't mean that.
02:08It means that you should sell it and use the benefit of 1.25 lakhs and re-enter it.
02:15This is called tax harvesting for both loss making and profit making.
02:19Mostly, the concept of tax harvesting applies to the people who have invested in equity shares.
02:29So, we have understood tax loss harvesting and tax gain harvesting.
02:33Now, I would like to ask you a small question.
02:35Can we adjust the short term in the long term and the long term in the short term through this harvesting?
02:43The short term can be adjusted against the long term.
02:46But, the long term cannot be adjusted against the short term.
02:48So, you should keep this in mind.
02:49You can take advantage of the losses in two ways.
02:52First, you can set it off.
02:54Second, you can carry it forward.
02:56For the next 8 years, if you don't have enough profit to adjust all your losses,
03:03then you can take it forward and set it off against the coming profits for the next 8 years.
03:10So, this is the short term rule.
03:12Mostly, this rule applies when you sell equity or security.
03:17Or, if you have a loss by selling a house or property, especially a residential property,
03:23then you can use it in this way.
03:28You talked about carrying forward your losses.
03:31I have a question related to this.
03:33Can you explain a little bit about how to carry forward your losses?
03:37Who can do it? How can it be done?
03:39How long does it take to carry forward your losses?
03:48When you file your return, the loss will come out at that time.
03:53When you calculate the return, if there is a loss,
03:56I will explain it to you.
03:58You can see that your loss was set off against the profit.
04:02Even after that, the loss was saved.
04:04This is called remaining loss.
04:06You can carry forward the remaining loss in the coming years.
04:13When you will have a profit in the next year,
04:15then you can minus the loss and your tax will be saved.
04:18Suppose, you have to save it.
04:20Suppose, you don't have any profit in the next year,
04:25but your loss is still there,
04:27then you can carry forward it for 8 years.
04:30In the next 8 years, you can knock off the loss of this year.
04:37Your tax will be saved.
04:39Those who have a loss in their property,
04:43we can't compensate them.
04:45We are sorry if someone has a loss.
04:47But at least you can use that loss to save tax.
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