For tax loss harvesting - do I have to buy back those shares after T+2

Family member has yes bank holding where she has both long and short term loss.

So if she sells all of them at current price - for tax loss harvesting - does she need to buy all of them after T+2

(after they are debited from her demat account ?)

or she can just forget about yes bank and still reduce both long term and short term gain tax?

May be next FY she might buy they back - please advise @TAXIQ.IN @Quicko @ShubhS9

Yes. To report (and thereby take advantage of) capital loss, she does not have to buy back the shares. Once the shares are out of her demat account at a loss, that loss is baked in and you can report it. If she doesn’t want to have these many YES bank shares in her portfolio, she can just forget about buying them back.

The buying back part is just to do this without causing any persistent change in the composition of your portfolio, since (presumably) you chose the shares in your portfolio because you believe in them and so want to hold them. The tax man doesn’t care if you bought them back or not: this part is just for keeping with your conviction in the shares. In the case of YES bank, if your family member really wants to have the shares in her portfolio, then she can buy them back any day after the “original” shares leave her demat account. Otherwise she doesn’t have to (indeed, shouldn’t!).

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Hey @curiousvi

Tax Loss Harvesting is the practice of selling your loss-making shares and mutual funds before the end of the financial year by converting these unrealized losses into a realized loss. If she is having unrealized losses in shares she can sell those and If she wants to hold the stock, she can buy the stock again so that the portfolio remains unchanged. On the other hand, if she does not want to rebuy the stock she can still reduce both long term and short term gain tax by realizing the unrealized losses.

Hope this helps! :slight_smile:

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