Is there any Wash Sale tax rules in India.
For eg. You buy 2 stocks, both for Rs. 100.
Now after a few months, one goes up to 110 & the other goes down to 90.
Now you plant to book profits - so you sell off that stock - so your capital gains come to Rs. 10 & you need to pay tax on it. So avoid taxes, you sell off the other also to book Rs. 10 loss. So essentially you have 0 capital gains & no tax liability. However, you also rebuy the 90 Rs stock soon. So essentially you avoided tax on your profits without lossing much more than the brokerage.
In the US, such a sale is called as a Wash Sale. Any rebuying done within a month is considered as a Wash Sale & you aren't allowed to use it to show Capital loss in your tax returns.
Is there any such rule in India?
For eg. You buy 2 stocks, both for Rs. 100.
Now after a few months, one goes up to 110 & the other goes down to 90.
Now you plant to book profits - so you sell off that stock - so your capital gains come to Rs. 10 & you need to pay tax on it. So avoid taxes, you sell off the other also to book Rs. 10 loss. So essentially you have 0 capital gains & no tax liability. However, you also rebuy the 90 Rs stock soon. So essentially you avoided tax on your profits without lossing much more than the brokerage.
In the US, such a sale is called as a Wash Sale. Any rebuying done within a month is considered as a Wash Sale & you aren't allowed to use it to show Capital loss in your tax returns.
Is there any such rule in India?