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Tax Treatment of Loan Against Mutual Funds Explained
LAMF avoids capital gains tax but interest costs usually do not offer personal tax deductions.
Loan Against Mutual Funds does not trigger capital gains tax because investors do not redeem their units.The pledged holdings remain invested, preserving tax status and compounding benefits.However, interest paid on LAMF is usually not deductible for personal expenses. Tax advisors recommend tracking loan usage, documentation, and repayment carefully to avoid assumptions and ensure compliance with prevailing Indian tax regulations and reporting requirements annually.Apply Now