Tax-Loss Harvesting: March 30 Is Your Last Chance To Save Taxes For FY26

Last Updated:March 29, 2026, 10:44 IST

As March 31 falls on a market holiday next week, investors effectively have just one final window — March 30 — to optimise their tax outgo for FY26 through tax-loss harvesting.

Tax-loss harvesting involves selling loss-making investments to offset gains realised elsewhere in the portfolio.

With March 31 (Tuesday) falling on a market holiday next week, investors effectively have just one final window — March 30 — to optimise their tax outgo for FY2025-26 through tax-loss harvesting. The strategy, commonly used by equity and mutual fund investors, allows taxpayers to offset capital gains by booking losses before the financial year ends.

Trade Date, Not Settlement, Determines Tax Liability

Capital gains are counted based on the trade date, not the settlement date. This means any sale executed on March 30 will be considered for the current financial year, even if the settlement happens in April. As a result, investors looking to reduce their tax liability must ensure that transactions are completed before markets close on Monday.

How Tax-Loss Harvesting Works

Tax-loss harvesting involves selling loss-making investments to offset gains realised elsewhere in the portfolio. Short-term capital losses can be set off against both short-term and long-term gains, while long-term losses can be adjusted only against long-term gains. Any unadjusted losses can be carried forward for up to eight assessment years, subject to filing returns within the due date.

“For taxpayers with investments in stocks, mutual funds, or real estate, it is important to review capital gains for the year and ensure that any capital gains are accurately accounted for and explore opportunities to carry forward any capital losses to offset future gains. Additionally, taxpayers may consider permissible tax-loss harvesting strategy, wherein they can sell investments at a loss to offset gains, thereby reducing the overall taxable income. This strategic review can help optimize your tax position,” said a Delhi-based chartered accountant.

LTCG Exemption Also Offers Opportunity

Apart from loss harvesting, investors can also utilise the tax-free limit available on long-term capital gains (LTCG). Under current rules, LTCG of up to ₹1.25 lakh in a financial year on listed equity shares and equity mutual funds is exempt from tax. Some investors deliberately book profits up to this threshold and reinvest to reset their purchase price, a strategy often referred to as gain harvesting.

Risks Of Last-Minute Execution

However, experts caution against making purely tax-driven decisions. Frequent buying and selling can increase transaction costs and may disrupt long-term portfolio allocation. Investors should also be mindful of market volatility, liquidity, and execution risks, especially on the last trading day.

With limited time left, reviewing portfolios and executing necessary trades on March 30 could help investors meaningfully reduce their tax burden for the year while aligning their holdings for the next financial cycle.

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