Tax harvesting is a process of increasing your post-tax returns on investment. In this process, an investor sells off his loss-making assets which he believes would not rebound in the near future, the loss arising from this transaction can be offset with gain arising from another transaction. Thus, it will help in increasing post-tax return on another investment.

Yes, An investor can harvest tax using the existing provisions of the Income Tax Act.

Tax harvesting is a process which is undertaken when an investor has booked profits on some of his mutual fund investments, to reduce taxation liability.

An investor needs to analyse his holdings and figure out whether there is any investment which is currently making a capital loss and in near future, has greater chances of making more losses instead of making a rebound, These investments could be sold to book capital loss, which in turn will help in reducing income tax liability on another investment.

• Long-term capital gains (units held for more than 12 months)- 10% for Individual, HUF, Domestic company, NRI

• Short-term capital gains (units held for 12 months or less)- 15% for Individual, HUF, Domestic company, NRI

• Long-term capital gains (units held for more than 36 months) - 20% after indexation for Individual/HUF, Domestic companies; NRI (10% without indexation if unlisted otherwise similar as for Individual/HUF)

• Short-term capital gains (units held for 36 months or less) - according to the tax bracket of the investor.