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Tax Harvesting

Gains from asset types like Mutual Fund, Stock are subject to capital gains tax. The taxation rate itself differs based on how long you hold your investment, whether it's debt or equity, whether you have more than 1 Lakh gains in a year etc. To further complicate things, there might be exit load applicable.

Paisa takes a generic approach and let the user configure when a commodity is safe to harvest. There are two fields related to tax harvesting.

  1. harvest - specifies the number of days after which the commodity is eligible for tax harvesting. This should be set based on fund exit load, fund category etc

  2. tax_category - This defines how the taxes are calculated as the government usually tweaks the tax code regularly with various rules like grandfathering, cost inflation index adjustment, etc.

    1. equity65 - This is for 65% or more investment in Indian equity.

    2. equity35 - This if for 35% or more investment in India equity but less than 65%

    3. debt - This is for debt funds.

    4. unlisted_equity - This is for unlisted foreign on Indian equity.

  - name: NIFTY
    type: mutualfund
    code: 120716
    harvest: 365
    tax_category: equity65
  - name: ABSTF
    type: mutualfund
    code: 119533
    harvest: 1095
    tax_category: debt

The tax harvest page will show the list of accounts eligible for harvesting.

Multiple Folios

Paisa uses FIFO method within an Account. If you have multiple folios, this might result in incorrect values. The issue can be solved by using a different Account for each folio.