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Comparing the Effective Cost of LAMF Versus Capital Gains Tax
Access funds while waiting for markets to recover or trend upward.
Redeeming ₹10 lakh with a ₹4 lakh long-term gain attracts 12.5% LTCG, resulting in ₹50,000 tax outgo. Alternatively, borrowing ₹10 lakh through LAMF at 10.5% for six months costs about ₹52,500 in interest. While the headline cost appears similar, redemption also removes capital from market participation. At an assumed 12% annual growth rate, the missed six-month appreciation could be nearly ₹60,000. Apply Now