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Reg Tax loss harvesting

Tax planning 650 views 3 replies

Hi,

     For the purpose of tax loss harvesting, I have sold some equity shares that are in loss on 30th Mar 2026 and bought back the same quantity of the same company on the same day itself. To be clear, I bought the 'n' number of shares of company XYZ on 16th Mar 2026 , sold all the 'n' quantities of XYZ on 30th Mar 2026 (31st Mar is holiday) and then re-purchased the same 'n' number of shares of XYZ on 30th Mar 2026. . I expect this to reflect in my capital gains calculation as short term capital loss, but not appearing so. I mean if I already had short term capital gains of value "CG1" and the loss I incurred with the sale on 30th Mar is "CG2", then I expect my short term capital gains to be "CG1-CG2" for FY26.  But my broker (zerodha) trading account P&L report of FY2026 still shows CG1 as my short term capital gains. Can someone please confirm that my expectation is correct and broker account calculation is incorrect ? Thanks in advance for your support.

 

Thanks

Mani

Replies (3)
Quick Summary
Tax loss harvesting is allowed in India. Short-term capital loss from selling shares can be set off against short-term capital gains under Section 70, even if the same shares are repurchased on the same day. Broker reports may not reflect adjustment; correct set-off is done in ITR filing.

✔️ Your tax logic is correct — loss harvesting works

✔️ Same-day buyback is allowed in India

⚠️ Broker P&L showing only CG1 is not an error, just a reporting format limitation

👉 While filing ITR, you should manually set off CG2 against CG1

Thank you for the reply. Can you please share any relevant authorised link (from income tax govt website) that I can share with my auditor to guide hime on calculation?

As per Section 70 of the Income-tax Act, 1961, short-term capital loss is eligible for set-off against short-term capital gains. There is no restriction on same-day repurchase of shares in India. Hence, the loss incurred on sale dated 30 March 2026 should be allowed to be set off against existing STCG


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