Case Study: Tax Loss Harvesting During a Volatile Market Year

A case study for investors with more than one income source, freelancers and small business owners, and anyone building long-term wealth. You follow an illustrative freelancer with a Zerodha portfolio of NSE-listed stocks and mutual funds through FY 2024-25: a year in which the Nifty 50 swung from the election-day crash to a record high in September and then into a long sell-off led by midcaps and smallcaps, while the 23 July 2024 Budget changed capital gains rates, the LTCG exemption and holding periods partway through the year. You see how the gains booked before and after Budget day were taxed, why booking gains near the peak used the exemption well, how losses were found and harvested in the fall without leaving the market, how the trades were timed around the last trading days of March, what the final computation and real saving looked like after costs, how it was reported in ITR-3 so the losses carried forward, and how the same year would play out under the Income-tax Act, 2025.