Quicko tax-loss-harvesting tool

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with Quicko or Zerodha.

Step-by-step procedure

Five steps per the procedure infobox.

How tax-loss harvesting works

Realised capital losses offset realised capital gains:

• STCL offsets STCG and LTCG.
• LTCL offsets only LTCG.
• Unutilised losses carry forward 8 years.

Example

You have:

• Rs 1,00,000 STCG (taxed at 20% post FY 2024-25 = Rs 20,000 tax).
• Rs 50,000 STCL sitting in Stock X (unrealised).

Realising the STCL by selling Stock X:

• Net STCG = Rs 50,000.
• Tax = Rs 10,000.
• Saving = Rs 10,000.

If you still want exposure to Stock X, you can re-purchase (carefully, given wash sale considerations in some jurisdictions; India has no formal wash sale rule but the IT Department can scrutinise).

Caveats

• No wash sale rule in India formally, but tax department can scrutinise immediate re-purchases.
• Section 94(8) dividend stripping rules apply for MFs.
• F&O treated as business income doesn’t follow the same loss-offset rules.

For complex situations, consult a Chartered Accountant.

See also

• Quicko
• Quicko ITR for Zerodha P&L
• Quicko integration with Zerodha
• Quicko vs ClearTax
• Tax loss harvesting
• Rainmatter Capital portfolio overview
• Capital gains tax in India
• F&O tax in India
• Section 94(8)
• Section 80C
• ITR filing
• Old vs new tax regime
• Income Tax Act
• Zerodha
• Zerodha Console
• Coin (Zerodha)
• Kite (Zerodha)
• SEBI
• ClearTax
• Tickertape
• Mutual funds in India
• Stock market in India
• STCG
• LTCG
• Capital loss carry forward
• F&O margin India

External references

• Quicko
• Income Tax Department
• Zerodha Varsity

References

1. Income Tax Act 1961, Sections 70, 71, 74, 94(8).
2. Quicko, Tax loss harvesting feature, quicko.com.