I have 100 shares of a company which I bought at Rs. 500. Now it has come down to 450. So if I sell that share at 450 and buy back at 350. What should I declare in tax returns as.? Rs 5000 loss or 10000 gain?
Of course Rs 5000 loss.
If you sell what you have bought at 350 again at 500, then you show Rs 10000 gain.
2 Likes
Hi Athvik,
Your understanding about minimizing taxes is very much right. If you have a portfolio of 4 stocks and all of them are in paper loss, you can sell them at a loss and buy them back after T+2 days.
BUT, you shall consider doing this only if you have OTHER trading short term gains against which you can show this loss to minimize your over all profit in this financial year. If that is not the case, there is no point in doing two transactions, as it will only increase your transaction cost and your holding cost.
So, calculate your realized NET profit in short term and long term first and then find ways to minimize your taxable profit by this way.
Hope this clarifies your query. In you have any other query, please let me know.
2 Likes
Thank You Nithin!!
In taht case, I have many shares which are on loss.So if I sell them and buy back at the same value on delivery, can I declare them as losses and make my taxable gain minimum???