Investors Use Tax Harvesting to Manage Capital Gains Amid Market Volatility

In March, Indian markets saw a significant selloff, wiping out nearly Rs 34 lakh crore amid geopolitical tensions. Investors are considering tax harvesting strategies—selling losing stocks to offset gains or realizing gains within tax exemption limits—to manage capital gains tax. While tax harvesting can improve tax efficiency, experts caution it should complement, not dictate, portfolio decisions, as mechanical use may lead to poor investment choices and harm long-term returns.