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What are your thoughts on utilising the Rs 1 lakh tax-exemption window on long-term capital gains?

It could be worthwhile to stagger your redemptions over a period of few months, suggests Ashutosh Gupta

What are your thoughts on utilising the Rs 1 lakh tax-exemption window on long-term capital gains? When is it appropriate to use it, such as rebalancing or switching from regular to direct plans?
- Ravi Vogeti

Now that long-term capital gains tax has been re-introduced for equity investors, this Rs 1 lakh tax-exemption window is quite useful. There could be several reasons for redemption - rebalancing, switching from regular to direct plan, consolidating your mutual fund portfolio or exiting from a poor-performing fund. It would be worthwhile to pay attention to your long-term capital gains tax applicability while redeeming, irrespective of the reason. If you are not in a hurry to redeem and staggering your redemption over a period of a few months can save you from a certain amount of tax liability, then it would make sense to do that. In fact, Value Research Premium membership will provide all the details of the applicability of capital gains tax on each of your holdings. So you can make use of it.

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