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Tax Treatment of Loan Against Mutual Funds Explained
LAMF avoids capital gains tax since investments are not sold, though interest deductibility depends on usage and tax regulations.
One advantage of Loan Against Mutual Funds (LAMF) is that borrowing does not trigger capital gains tax, as mutual fund units are not sold. Investors retain ownership of their holdings while accessing liquidity. Interest paid on the loan may be tax deductible in specific cases, such as when funds are used for business purposes, subject to prevailing tax rules. However, misuse or prolonged borrowing can affect financial discipline. Apply Now