Money Guru: Everyone wants to earn profit by investing in the stock market. But for this, you should also know all the nuances related to the market. Only then you can earn profit even with less investment. Tax harvesting is a better option for this. You can save tax on your equity income through tax harvesting. But the question is what is Tax Harvesting Scheme? How does it help in saving tax?

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Swati Raina discussed this with tax expert Ruchika Bhagat on the popular TV show 'Money Guru.'

See Zee Business Live TV Streaming Below:

https://www.zeebiz.com/video-gallery-money-guru-what-is-tax-harvesting-s...

What is Tax Harvesting?
Bhagat said there are two types of Tax Harvesting - Tax Gain Harvesting and Tax Loss Harvesting. We can understand Tax Gain Harvesting in such a way that when we make a profit up to Rs 1 lakh in any Long Term Capital Gain (LTCG) and we do not sell it anymore. It has two advantages, one, we earned a profit of Rs 1 lakh and secondly, we did not even have to pay any tax on it. We can further invest this money in some other investment. This also strengthens and diversifies our portfolio.

Similarly, in tax-loss harvesting, we look at our Long Term Capital Gains (LTCG) at the end of a year. We can also set off the profit we have earned from our other long-term loss. With this, we can also save on tax.

Expert Advice
While doing tax harvesting, it should be kept in mind that it is not a one-year issue. If you do tax harvesting, do it every year, she suggested. Along with this, choose your portfolio very carefully while investing. Under the Tax Harvesting Scheme, you can reduce your tax by staying within the tax net.