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The Tax Shield: Borrowing Against Mutual Funds Helps Avoid Capital Gains
Loans against mutual funds provide liquidity without triggering capital gains tax, helping investors avoid an immediate 12.5 to 20 percent tax outgo.
Redeeming mutual fund units to meet liquidity needs can trigger immediate tax liabilities, reducing the overall value of an investor’s portfolio.Long term capital gains above ₹1.25 lakh are taxed at 12.5%, while short term gains may attract tax up to 20 percent depending on the holding period and asset type.Financial planners highlight that taking a LAMF offers a tax efficient alternative. Apply Now