Suffered loss in Adani stocks? Get relief during ITR filing
What's the story
Gautam Adani-owned Adani Group went into a meltdown after Hindenburg Research's damning report in January.
Investors suffered heavy losses as its market cap worth over $100 billion was wiped out.
However, Indian taxpayers who still keep Adani stocks in their kitty can save money during income tax filing in the current assessment year (AY 2023-24).
Well, how to do so? Let us find out.
Context
Why does this story matter?
Never let a crisis go to waste. While this statement has an ominous ring to it, the ruckus around Adani Group has proved to be an unlikely boon for taxpayers.
The deadline for ITR filing is only a few months away. So, people should undertake all relevant tax-saving measures, provided they are not illegal.
We have discussed an excellent method in the story.
Steps
Use the loss harvesting method to get the benefits
Taxpayers can use loss harvesting tool to save money. Simply hold Adani stocks and book loss in case of bouncebacks. Once they fall further from booking levels, purchase the stocks again.
Stockholders can lower tax outgo by setting off losses in Adani stocks with the gains received from other shares in the current fiscal.
Those filing ITR can use this for all loss-making stocks.
Advice
'Adani group stocks are highly volatile'
Describing how loss harvesting is beneficial, GCL Broking CEO Ravi Singhal said, "If a stock market investor has received substantial capital gains during the current fiscal, then they can sell Adani group stocks and book loss."
"As Adani group stocks are highly volatile, they should book loss on rise and enter when it undergoes profit-booking and comes below loss booking level," he added.
Belief
Long-term losses can only be set off against long-term gains
The CEO and founder of MyFundBazaar, Vinit Khandare claimed the stock market is under sell-off pressure and that this is an opportunity for taxpayers to use loss harvesting to save money.
However, he urged investors to keep in mind the kind of stocks they are selling as short-term losses can be set off against short/long-term gains, while long-term losses only work against long-term gains.
Stats
What's the current state of Adani stocks?
The Adani conglomerate is having a rough time. Today too, Rs. 40,000 crore was wiped out from the valuations of its companies.
Share price of Adani Enterprises has fallen from Rs. 3,442 to Rs. 1,600 apiece, Ambuja Cements is down to Rs. 355, Adani Ports fell to Rs. 586, Adani Green Energy fell to Rs. 567/share, and finally ACC went down to Rs. 1,838.