neutral
Recently
Tax Implications of Loan Against Mutual Funds
LAMF avoids capital gains tax since units are pledged, not sold, preserving portfolio continuity.
Loan Against Mutual Funds does not trigger capital gains tax because the mutual fund units are pledged as collateral and not redeemed. Since there is no sale transaction, investors avoid immediate tax liability and continue benefiting from potential long term capital appreciation.This structure helps preserve portfolio allocation and reduce tax disruption. However, interest paid on such loans is usually not tax deductible for personal usage.