Tax Harvesting Before March 31: Strategic Realisation to Minimise Capital Gains Tax

Tax harvesting constitutes a legally permissible tax optimisation strategy whereby investors proactively realise capital losses to offset taxable gains or crystallise gains within statutory exemption thresholds prior to the financial year-end on 31 March, since capital gains are computed on a year-specific basis and must be booked within the relevant period to affect liability, with loss harvesting enabling set-off against gains and carry-forward of excess losses, and gain harvesting permitting utilisation of the ₹1.25 lakh long-term capital gains exemption through controlled sale and reinvestment, thereby reducing effective tax incidence without altering underlying investment positions, provided transactions are executed within the statutory timeline and in conformity with applicable set-off and reporting rule