As March 31st draws near, here is Nithin Kamath's advice to investors

NEW DELHI: Zerodha co-founder Nithin Kamath has advised investors to make the most of tax-loss harvesting to reduce tax liability on investments. If an investor has realised capital gains on which she or he needs to pay taxes, one can reduce tax outgo by selling any holdings that are in losses before March 31st, Zerodha tweeted.

This act of booking unrealised losses, effectively reducing the realised gains and, hence, reducing the tax payable, is called tax loss harvesting. At present, short-term capital gains tax is levied at 15 per cent on stocks sold before 1 year of investments.

In a series of tweets, Kamath said successful investing is about doing boring things well. "Booking a loss can be painful because we are all loss averse, & we instinctively try to avoid losses. But reducing taxes can add up in the long run & lead to better portfolio returns," he said.


Kamath asked investors to check if they have realised short-term capital gains on which they are required to pay 15 per cent tax.

If there are, he advised investors to check whether they have any holdings with unrealised short-term loss.

"If yes, sell the holdings (<365 days), book the loss & reduce your STCG & hence taxes," Kamath tweeted, adding that this is also a nice way to get rid of duds in your portfolio.