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Tax-loss harvesting is the practice of selling a share that is incurring a loss, so that by realizing the loss, you can offset the same against realized gain for the same year and save on taxes. The security has to move out of the demat account by delivery sell transaction and the sold security is replaced by the same or a similar security.
Capital gains means, any gain arising on the sale of capital assets such as real estate, equity or equity-oriented products. Here we are discussing about the capital gains arising on sale of equity and equity-oriented funds. Now, investment in shares or equity oriented mutual funds can be done for short-term or long-term period. Short term means investing for a period of up to 12 months and long-term means investing for a period of more than 12 months.
Any profit or gain arising from stock investment is less than 12 months termed as short-term Capital gains. Until 23rd July, 2024, short term capital gains were taxed at a flat rate of 15%. As per the new budget announced on 23rd July, 2024, tax rate on short term capital gains has increased from 15% to 20%.
For example, Mr. A bought 100 shares of Larsen & Toubro ltd at Rs 950 per share on 1st February, 2024.
Case 1: Shares sold before 23rd July, 2024
Mr. A sold the same 100 shares of Larsen & Toubro at Rs 1500 per share on 3rd June, 2024, within 1 year (less than 12 months).
In this case, gains on Larsen & Toubro = Rs. 55,000
Short term capital gain tax = 55000 X 15% = 8,250
Case 2: Shares sold after 23rd July, 2024
Mr. A sold the same 100 shares of Larsen & Toubro at Rs 1500 per share on 25th July, 2024, within 1 year (less than 12 months).
In this case, gains on Larsen & Toubro = Rs. 55,000
Short term capital gain tax = 55000 X 20% = 11,000
Case 3: Shares sold before 23rd July, 2024 and also after 23rd July, 2024
Mr. A sold 30 shares of Larsen & Toubro at Rs. 1000 per share on 3rd June, 2024. He sold the remaining 70 shares of Larsen & Toubro at Rs. 1200 on 25th July, 2024.
In this case, gains on 30 shares = Rs. 1500
Gains on 70 shares = Rs. 17,500
Now, tax will be calculated for the gains according to the tax rates applicable to the date when the shares were sold i.e. pre-budget or post-budget.
Short term capital gain tax on 30 shares = 1,500 X 15% = 225
Short term capital gain tax on 70 shares = 17,500 X 20% = 3,500
Total gains = 3,725
Any profit or gain arising from stock investment are considered as long term capital gains, if the holding period is more than 1 year. Until 23rd July, 2024, Long term capital gains up to Rs. 1 Lakh in a financial year were exempted from tax. As per the new budget announced on 23rd July 2024, the exemption has been increased from Rs.1,00,000 to Rs. 1,25,000. The tax rates on long-term capital gains have been increased from the earlier rate of 10% to a new rate of 12.5%.
Example:
Mr P bought 200 shares of Titan Ltd. At Rs. 800 per share on 1st May, 2023.
Case 1: Shares sold before 23rd July, 2024
Mr. P sold the same 200 shares of Titan at Rs. 1500 per share on 3rd June, 2024. Holding period of the shares is more than 12 months.
Long Term Capital Gain = 1,40,000 (Up to Rs 1,25,000 is not taxed as per the provision)
Long term capital Gain Tax= (140000-125000) = 15,000 X 10% = 1,500
Case 2: Shares sold after 23rd July, 2024
Mr. P sold the same 200 shares of Titan at Rs. 1500 per share on 25th July, 2024. Holding period of the shares is more than 12 months.
Long Term Capital Gain = 1,40,000 (Up to Rs 1,25,000 is not taxed as per the provision)
Long term capital Gain Tax= (140000-125000) = 15,000 X 12.5% = 1,875
Case 3: Shares sold before 23rd July, 2024 and also after 23rd July, 2024
Mr. P sold the 90 shares of Titan at Rs. 1500 per share on 3rd June, 2024. He sold the remaining 110 shares of Titan at Rs. 2000 per share on 25th July, 2024.
Long Term Capital Gain on 90 shares = 63,000 (Up to Rs 1,25,000 is not taxed as per the provision)
Long Term Capital Gain on 110 shares = 1,32,000 (Up to Rs 1,25,000 is not taxed as per the provision)
In this case, Rs. 70,000 will be taxed at the new rate of 12.5%.
(Computation of 70,000 = 1,25,000 – 63,000 – 1,32,000 = 70,000)
Client would need to make these transactions before March 31, 2024 to harvest losses for Financial Year 2023-24.
The terms used in the Tax Loss Harvesting page on our website are explained below:
1. Realised profits – Shows the profits realised upon the sale of shares, in the short-term or long-term
2. Unrealised losses – Shows the losses incurred by the customer on sale of shares
3. Tax Liability – Shows the amount of taxes the customer is liable to pay before offsetting losses
4. Tax Saving opportunity – Shows the amount of tax that can be saved by realizing unrealized losses (Note that if unrealised losses are higher than realised gains, the tax saving opportunity amount will remain the same as tax liability)
Other points to remember:
1. If there are no realised profits or if the unrealised losses are greater than the realised gains, there will be no tax saving opportunity.
2. The FIFO (First-In First-Out) method is used in Tax Loss Harvesting. If you have holdings making short-term losses and long-term profits in the same stock, the entire holding that is making long-term profits needs to be sold in order to book short-term losses. This will simultaneously book the long-term capital gains for that stock.
As per Finance Act 2020 shareholders will have to pay the tax on dividend income as per their tax slabs at and additional TDS would be charged at 10% if the dividend from any company received exceeds Rs 5000.
There is an important update that will enhance the securities payout process for Margin Trading Facility (MTF) positions.
Starting February 24, 2025, in line with SEBI guidelines, securities payouts will be directly credited to your active demat account by the Clearing Corporation and depositories (NSDL/CDSL).
Key Changes to MTF:
Auto-Pledge of MTF Shares -
All shares bought in MTF from Monday, February 24, 2025 will now be auto-pledged. You will no longer need to confirm the pledge every time you buy the securities under MTF.
Key Points to Note:
Statements & reports isn’t available in the app but you can check it in the main website through below path.
Path: Website > Portfolio > Statements & Reports
Starting from March 18, 2024, fund payouts will be credited to your account after 3:30 PM on the next working day (T+1)
Key Points to Note: You will get access to limits in your ICICI Direct account before the market opens on the next trading day, enabling you to execute other transactions for Equity and F&O.
Impact of the change explained
Equity Segment
If you sell Rs. 1,00,000 worth of shares on March 18, 2024 (Monday), funds will be credited to your account on March 19, 2024, after 3:30 PM. Limits against this transaction will be available from the evening of March 18, 2024.
F&O Segment
For Futures & Options profit made on March 18, 2024 (Monday), funds will be credited to your account on March 19, 2024, after 3:30 PM. Limits against the profit will be available before the market opens on the next trading day, i.e., March 19, 2024.
BSE – Derivatives is currently available from website only but it will be made available very soon on ICICIdirect mobile apps as well.
Important: Fraudulent Activity and Unauthorized Use of ICICI Direct & ICICI Securities Brand in India
It has come to our (ICICI Direct) notice that certain unknown persons/entities claiming to be part of ICICI Direct / ICICI Securities are soliciting/offering services with respect to trading activities through various online platforms, including WhatsApp groups.
Based on the limited information available to us, we believe that the activities being undertaken by the person/s or entity/s purporting to be part of ICICI Direct and/or ICICI Securities are illegal and fraudulent. Such activities also deeply tarnish the goodwill and reputation of ICICI Direct & ICICI Securities. These activities are being reported to the relevant authorities for necessary action.
We urge our investors and public at large to be cautious and vigilant in this regard and be wary of such unscrupulous person/s and/or entity/s impersonating ICICI Direct and/or ICICI Securities.
In addition, we recommend that you DO NOT:
Kindly note that ICICI Direct DOES NOT:
You may please refer this link (https://www.icicidirect.com/services/cybersecurity) for our official list of websites / mobile applications / social media handles of ICICI Direct/ ICICI Securities.
Stock list information isn’t available in the app but you can check it in the main website through below path.
Path: Website > Stocks > Services > Stock List
The profit will be credited in your bank account after 1:00 PM on T+1 day.
Periodic Call Auctions were introduced by SEBI in 2013 to reduce volatility in certain illiquid stocks. Illiquid stocks, meeting specific criteria like low daily trades and trading volume, are included in PCA.
Stock exchanges shall identify illiquid scrips at the beginning of every quarter and move such scrips to periodic call auction mechanism. To learn more, refer to BSE FAQ (PDF) and NSE circular (WEB).
Session No |
Start Time- Order Placement |
Order matching |
Buffer period |
1 |
09:30 AM - 10:15 AM |
10:15 AM - 10:23 AM |
10:24 AM to 10:30 AM |
2 |
10:30 AM - 11:15 AM |
11:15 AM - 11:23 AM |
11:24 AM to 11:30 AM |
3 |
11:30 AM - 12:15 PM |
12:15 PM - 12:23 PM |
12:24 PM to 12:30 PM |
4 |
12:30 PM - 01:15 PM |
01:15 PM - 1:23 PM |
01:24 PM to 01:30 PM |
5 |
01:30 PM - 02:15 PM |
02:15 PM - 2:23 PM |
02:24 PM to 02:30 PM |
6 |
02:30 PM - 03:15 PM |
03:15 PM - 3:23 PM |
03:24 PM to 03:30 PM |
To buy or sell illiquid stocks in PCA, place orders in the first 45 minutes.
Transactions are executed based on order matching in the subsequent 8 minutes.
1. |
All trades placed on settlement holidays in the Equity and Derivative segment will be settled the next day. |
2. |
All shares bought in Delivery on settlement holidays will be visible under Security Projection (BTST) holdings on next day but you will only be able to sell them till settlement holidays +1 day. |
3. |
All shares bought in MTF on settlement holidays will be visible under MTF positions but you will only be able to sell them on or after settlement holidays + 2 days. |
RTCM was introduced with a view to restrain abnormal / non – genuine transactions executed with an objective of transferring profit / loss between entities or creation of artificial volume in securities / contracts.
As per Exchange circular no. NSE/SURV/62493 dated June 18, 2024, Exchange will monitor transactions on an intraday basis, between a pair of PANs. As a new trade takes place between a pair of PANs, the quantity of the trade will get aggregated to either of the legs (First Leg or Second Leg) i.e. “First leg - where PAN “A” is the buyer and PAN “B” is the seller” or “Second leg - where PAN “A” is the seller and PAN “B” is the buyer”. At every trade instance after the above aggregation, wherever such aggregated quantity of two legs between PAN “A” and PAN “B” (i.e. first leg is where PAN “A” is the buyer and PAN “B” is the seller and second leg where PAN “B” is the buyer and PAN “A” is the seller) breach thresholds with respect to the specified parameters, the trade will be eligible for cancellation.