How to harvest gains, step by step
- Check your capital gains statement (from CAMS or KFintech) for units held over 12 months.
- Redeem units with total long-term gains of up to ₹1.25 lakh, minus any gains already booked this financial year.
- Reinvest the money in the same fund on the same or next day.
- Do this before 31 March every year.
How the redemption amount is worked out
Gains are spread across your units, so the calculator assumes each rupee redeemed carries the same share of gain: amount to redeem = current value × gain to book ÷ total gain. Funds actually redeem the oldest units first, which usually carry more gain, so you may need to redeem a little less. Your fund's capital gains statement shows the exact figure.
Why it adds up
Each harvest raises your purchase cost by the gain booked. When you finally sell after many years, the taxable gain is smaller by the total you harvested. Over 10 years that can mean well over ₹1 lakh less tax for a single investor.
Need the tax on a specific sale? Use the mutual fund capital gains tax calculator.