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Tax Implications of Loan Against Mutual Funds in India
LAMF avoids capital gains tax since units are pledged, not redeemed.
Loan Against Mutual Funds does not trigger capital gains tax because units are pledged, not redeemed. This makes it a tax efficient liquidity option compared to selling investments. However, investors must continue monitoring portfolio performance and interest obligations. Failure to maintain margin requirements may lead to partial liquidation by lenders. Before proceeding, borrowers should understand all structural aspects outlined carefully.Apply Now