I am copying an extract written by Ms. Larissa Fernand of morning star india.
An extract is as follows:-
the “wash sale” rule, an IRS regulation prohibiting an investor from claiming a loss by selling and purchasing the same or similar securities without a 30-day holding period. The wash-sale rule provides that if an investor wants to sell a security at a loss, then buy the same or a “substantially identical” security within 30 calendar days either before or after the sale, the wash-sale rule will kick in and no loss will be claimable for that security on the current-year tax return.
Source: https://www.morningstar.in/posts/62595/diy-investors-go-horribly-wrong.aspx
Wondering if there are any such rules in India. Please do read this post, it is quite interesting on how things can go wrong if we are not fully aware of tax rules.