Nitin Kamath, co-founder and CEO of Zerodha has a piece of advice for investors. Taking to Twitter on Wednesday, Kamath advised investors to consider tax-loss harvesting for better portfolio returns over the long term.
“Successful investing is about doing boring things well. One of them is tax-loss harvesting. Booking a loss can be painful because we all avoid losses, and we instinctively try to avoid losses. But reducing taxes can add up in the long run. And lead to better portfolio returns,” Kamath said.
Kamath urged investors to check whether they have received short-term capital gains on which they have to pay 15% tax. If so, investors have been asked to scrutinize any holdings with unrealized short-term losses. If so, investors were asked to sell the holdings in less than 365 days, book losses and reduce short-term capital gains and hence taxes.
“It’s also a good way to get rid of the mess in your portfolio,” Kamath said.
In a separate Twitter post, Zerodha said, if investors have realized capital gains, on which they have to pay taxes, they can reduce your tax outgo by selling any holdings that were making losses before March 31. Also known as “tax-loss”. Harvesting.”
The stock broking platform further said that it has a report on the console which shows the loss that can be deducted.
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