Rs 16L LTCG tax liability: Pay or reinvest money?
A 57-year-old individual recently sold land near Jewar airport, resulting in a Rs 16 lakh long-term capital gains (LTCG) tax liability. Two options are being considered: reinvesting the proceeds in another property for tax exemption or paying the tax and investing the remaining amount in mid-cap mutual funds for growth. Ravi Kumar, a TV Director at Gaining Ground Investment Services, advises verifying if the tax calculation is accurate and if the property qualifies for any exemptions.
If not, paying the tax and investing the surplus for long-term growth is recommended. However, spreading the investment across a diversified equity portfolio with a portion in mid-caps is suggested. Similarly, Rushabh Desai, Founder of Rupee With Rushabh Investment Services, supports tax-gain harvesting by selling long-term equity holdings with a 56% gain.
He explains how the property's loss can offset the equity gains, resulting in a tax-free scenario. Desai offers two options: rebalancing into debt products for portfolio stability or reinvesting the proceeds in core equity mutual funds to maintain the long-term equity strategy. Both experts emphasize focusing on long-term returns, flexibility, and peace of mind rather than merely saving tax.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
