Just wanted to give a heads-up to anyone planning to do tax loss harvesting, especially if you’re using multiple accounts.
In the previous financial year, I tried this approach: I sold holdings in Account 1 and simultaneously bought the same quantity in Account 2. I then sold the holdings in Account 2 and bought them back in Account 1. All of this happened within less than a minute. Effectively, I was harvesting losses across both Account 1 and Account 2 on the same day.
On paper, everything looked fine based on the P&L statements generated by Broker 1 and Broker 2. However, when the AIS (Annual Information Statement) was generated for ITR filing, it created confusion at my accountant’s office. The transactions as reflected against my PAN didn’t neatly match the broker P&L reports, which led to unnecessary back-and-forth and reconciliation issues.
So this time around, I’m planning to be more cautious. Instead of doing the counter purchases on the same day, I intend to buy back the positions in the opposite accounts on the next day. Hopefully, that adds clarity in AIS reporting and avoids mismatches during filing.
Thank you for your attention to this matter.