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Tax Efficiency of Borrowing Against Mutual Funds During Bull Markets
LAMF offers flexibility during unexpected financial requirements.
During bull markets, unrealized gains accumulate significantly, increasing potential tax liability upon redemption. Selling mutual fund units may attract 12.5% long-term capital gains tax, immediately reducing investable surplus. Borrowing against mutual funds allows investors to access liquidity without triggering taxation, thereby keeping the full corpus invested. The deferred tax continues compounding within the portfolio instead of being paid out. Apply Now