Tax Selling

Tax selling — also referred to as tax-loss harvesting — is an investment strategy in which an investor deliberately sells securities that have declined in value below their purchase price to realise a capital loss, which can then be used to offset taxable capital gains realised elsewhere in the portfolio — thereby reducing the overall capital gains tax liability for the financial year. In India, short-term capital losses (from assets held for less than one year for equity) can be set off against both short-term and long-term capital gains, while long-term capital losses can only be offset against long-term capital gains. After selling for tax purposes, investors often repurchase the same or similar securities after the wash sale window to maintain their desired portfolio exposure while locking in the tax benefit. Tax selling activity tends to intensify toward the end of the financial year (February–March in India). For investors on Ventura Securities managing multi-asset portfolios with realised gains, strategically timing tax selling decisions can meaningfully improve after-tax portfolio returns — making it an important year-end tax planning tool.