(Complicated) tactic to harvest capital losses

[gunderson500]

@jesuslovesme1973 I'm not a tax expert but I've spoken about this to some who are and the view is that FIFO will apply per folio, not across folios. Here's a link to a circular that will hopefully clarify this (tl;dr: jump to 5(b) in the circular): https://www.incometaxindia.gov.in/communications/circular/910110000000000355.htm

If you read the circular, you may notice that it is silent on mutual funds. The applicability to mutual funds can be drawn via another circular: https://www.incometaxindia.gov.in/Communications/Circular/910110000000000282.htm

 

[jesuslovesme1973]

@gunderson500

Here's a link to a circular that will hopefully clarify this (tl;dr: jump to 5(b) in the circular): https://www.incometaxindia.gov.in/communications/circular/910110000000000355.htm

This is pretty clear for Stocks.

In the depository system, the investor can open and hold multiple accounts. In such a case, where an investor has more than one security account, FIFO method will be applied accountwise. This is because in case where a particular account of an investor is debited for sale of securities, the securities lying in his other account cannot be construed to have been sold as they continue to remain in that account.

Re mutual funds I found this at AMFI

https://www.amfiindia.com/Themes/Theme1/downloads/sai/sai44.pdf

De-duplication of Folios / Consolidation:In case an investor holds investments in multiple folios under the Fund, the AMC has the right to consolidate all the folios belonging to the same investor into one folio (target folio). All the information as available in the target folio including bank account details will be used for further processing. Accordingly, redemptions / switch-out requests made subsequent to the consolidation shall be processed based on the First-in-First-out (FIFO) methodology as if units were held in a single folio.

Which may essentially lay waste all the work done.

 

[gunderson500]

@jesuslovesme1973

Which may essentially lay waste all the work done.

Yes, it may.