Mika
VIP Contributor
Whenever you sell your stocks, you will have to pay taxes. The money you make by selling your stocks is referred to as capital gains, when you make this money you pay capital gain tax, which can be long term as well as short term. There is one method that will help you reduce your taxes on capital gains, you can even avoid paying this tax legally. The term used for this purpose is called tax harvesting.
If you have stocks that are at loss, you can sell these stocks at loss intentionally and register the loss in your financial year. The loss you made by selling your poor-performing stocks will negate the gains you make by selling stocks at profit. You will then have no tax obligations, which means you will be paying zero taxes.
When you sell your stocks at loss, you can again buy these stocks with the money you made by selling these stocks. By doing this you will have the same number of stocks in your portfolio but the capital gains will be zero or less than the amount eligible for taxation.
If you have stocks that are at loss, you can sell these stocks at loss intentionally and register the loss in your financial year. The loss you made by selling your poor-performing stocks will negate the gains you make by selling stocks at profit. You will then have no tax obligations, which means you will be paying zero taxes.
When you sell your stocks at loss, you can again buy these stocks with the money you made by selling these stocks. By doing this you will have the same number of stocks in your portfolio but the capital gains will be zero or less than the amount eligible for taxation.
